Schwab Launches ETF To Give Investors Significant Crypto Exposure

August 11, 2022 9:34 pm Comments

Schwab Asset Management just revealed that it has launched its own Schwab Crypto Thematic ETF which will provide investors with a new way to gain crypto exposure.

The firm states that this was done in order to answer investor demand and will likely become popular as it allows one to invest in crypto without directly owning crypto.

Although crypto is still seen as a volatile asset class that is very speculative, it seems that Schwab investors are opening up to the new asset class and see it as an essential part of their portfolio.

With a major asset firm like Schwab making such a move, it may not be too long before other asset management firms follow the same route and launch their own ETFs.

By doing so, it is expected that a large amount of new investor capital will start flowing into the crypto market whether it be directly or indirectly.

CNBC reports:

“It is a very speculative investment,” the head of equity product and strategy said on Monday. “But we are seeing certain segments of Schwab investors that are seeking access to this asset category in their portfolios.”

The fund does not target actual cryptocurrencies. Instead, it bundles companies with skin in the game.

″[The Schwab Crypto Thematic ETF] is different than other crypto-related ETFs on the market today in the way that the index identifies, selects and weights constituents based on a company’s relevance to the crypto ecosystem using natural language processing,” Botset said in the ETF launch news release.

Widely held crypto names including MicroStrategy, Marathon Digital, Riot Blockchain, Coinbase, Silvergate Capital, Robinhood and Interactive Brokers have holdings in the fund, not unlike other crypto-related thematic products.

This crypto thematic ETF also has its own unique advantages that make it more preferable than other investment options.

For example, it is one of the lowest cost crypto related products on the market right now and it is recorded that the ETF is already up 5% since its initial launch.

What makes the launch even better is the fact that it launched in the middle of the so-called “crypto winter” which indicates that the overall crypto industry is continuing to experience increased investor demand.

With more and more institutions getting involved, it seems that acquiring prominent digital assets right now may be a huge potential opportunity.

BusinessWire concludes:

“For investors who are interested in cryptocurrency exposures, there is a whole ecosystem to consider as more companies seek to derive revenue from crypto directly and indirectly,” said David Botset, Managing Director, Head of Equity Product Management and Innovation at Schwab Asset Management.

“The Schwab Crypto Thematic ETF seeks to provide access to the growing global crypto ecosystem along with the benefits of transparency and low cost that investors and advisors expect from Schwab ETFs.”

The index does not directly track or invest in cryptocurrencies. Rather, it is designed to deliver global exposure to companies that may benefit from one or more of the following business activities: either directly or facilitating others in validating consensus mechanisms for (such as mining or staking) investing in, or trading cryptocurrency or other digital assets; enabling the use of cryptocurrency or other digital assets to buy or sell goods or services; and developing, distributing or implementing applications of blockchain or other distributed ledger technology, including in new cryptocurrencies or digital assets.

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