Key Takeaways
What makes this ETF different from others?
It is an actively managed multi-coin ETF, which uses fundamental, valuation and momentum factors to determine which assets to hold and their weighting.
Could this filing impact the crypto ETF landscape?
Yes, analysts say this could trigger a “crypto land rush,” with more than 200 new products hitting the market over the next year.
T. Rowe Price is making its debut in the crypto space with a new actively managed ETF submit with the SEC.
The 87-year-old asset manager filed an S-1 form with the SEC on October 22 to officially launch the Active Crypto ETF.
ETF filing from T. Rowe Price
The fund, which aims to outperform the FTSE Crypto US Listed Index, will trade on the NYSE Arca under a ticker to be announced.
According to the filing, the ETF will hold between five and 15 digital assets. They include Bitcoin [BTC]Ethereum [ETH]Solana [SOL]Ripple [XRP]Dogecoin [DOGE]Cardano [ADA]Avalanche [AVAX]Shiba Inu [SHIB]and Litecoin [LTC], where managers select the final assets based on market conditions.
To comply with SEC regulations and avoid legal pitfalls that hinder other crypto projects, managers will only carry “eligible assets.”
They will also keep some of their holdings in cash, stablecoins or safe short-term investments such as bank deposits to maintain liquidity for operational expenses.
How is this ETF different from others?
According to ReutersBryan Armour, an ETF analyst at Morningstar, noted:
“It’s a surprise to see them as a relatively late entrant, but they plan to offer something differentiated to try to penetrate the space.”
In contrast to the wave of single-coin ETF filings, T. Rowe Price’s proposal stands out as a rare actively managed multi-coin fund.
According to the prospectus and a company spokesperson, fund managers aim to outperform the FTSE Crypto US Listed Index. They will use fundamental analysis, valuation metrics and momentum factors to decide which assets to hold.
In addition, they will determine how these assets should be weighted within the portfolio.
Analysts weigh in
In response to this momentum, Nate Geraci, president of NovaDius Wealth Management, said,
“The importance of T. Rowe Price’s filing for an actively managed crypto ETF out of left field cannot be overstated…T. Rowe is the quintessential old asset manager, founded in 1937. They manage about $1.8 trillion in assets, but only got involved in ETFs in 2020. Now they’re moving into crypto.”
Echoing a similar sentiment, Bloomberg Senior ETF Analyst Eric Balchunas said: added,
“SEMI-SHOCK: T Rowe Price just filed for an active Crypto ETF. They are a top 5 active manager by assets (mostly mutual funds). I didn’t expect it, but I understand. There will also be a land rush for this space.”
Meanwhile, the altcoin market showed signs of potential recovery, driven by a wave of open crypto ETP applications, led by Solana, Ripple and Ethereum.
Given all this, analysts predict that this could mark the start of a broader ‘crypto land rush’, with more than 200 products potentially coming to market within a year.