State Street And Galaxy Digital Collaborate on New Crypto ETFs

By: Eliza Bennet

State Street Global Advisors, a prominent subsidiary of State Street, has announced a significant collaboration with Galaxy Digital to introduce innovative crypto ETFs that venture beyond Bitcoin. This initiative comes as part of the growing trend among traditional financial institutions to explore digital asset-based investment options.

In a statement dated June 26, State Street revealed its partnership with Galaxy Digital, a renowned crypto investment firm. The newly proposed ETFs will provide investors with access to the expansive $2.4 trillion digital asset ecosystem through various manager-directed strategies. This collaboration aims to combine the strengths of both entities, leveraging their expertise and resources.

An application has already been filed with the US Securities and Exchange Commission (SEC) to register the SSGA Active Trust, a crypto-focused fund. This fund is set to invest in a diverse array of securities related to the crypto market, including equity securities of crypto companies, futures ETFs, contracts, and spot crypto exchange-traded products (ETPs). The targeted sectors for this investment include blockchain software developers, Bitcoin miners, exchanges, and crypto payment processors. State Street Bank is tasked with the administrative and accounting responsibilities for the new digital asset ETFs, while Galaxy Digital will handle the day-to-day operations.

State Street highlighted the increasing interest in digital assets from both institutional and retail investors since the advent of Bitcoin ETFs. The aim is to provide investment options that go beyond spot Bitcoin. Galaxy Digital CEO Mike Novogratz praised the initiative, predicting broader investment opportunities within the ecosystem. Despite this positive outlook, some market observers, like Nate Geraci, President of ETF Store, expressed surprise that State Street did not prioritize spot Bitcoin and Ethereum ETFs given their market dominance.

The launch of Bitcoin ETFs earlier this year marked a significant milestone, currently managing over $50 billion in assets. Experts anticipate that the launch of Ethereum ETFs could attract up to $15 billion in inflows within the first 18 months, underscoring the growing appetite for diversified digital asset investments.