Charles Schwab's asset management arm launches crypto-linked ETF

Schwab Asset Management, the asset management arm of financial giant Charles Schwab, has launched an exchange-traded fund (ETF) with exposure to firms linked to cryptocurrencies. 

In a Friday announcement, Schwab said its Crypto Thematic ETF was expected to be available for trading on the New York Stock Exchange’s Arca under the ticker STCE on Aug. 4. The fund tracks Schwab’s Crypto Thematic Index, providing an investment vehicle with exposure to companies “that may benefit from the development or utilization of cryptocurrencies and other digital assets.”

Likely because the United States Securities and Exchange Commission, or SEC, has not given the green light to ETFs providing direct exposure to Bitcoin (BTC), the Schwab fund will indirectly invest in crypto through companies. Schwab said the firms included those involved in mining and staking as well as those developing applications on the blockchain or distributed ledger technology.

“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, Schwab Asset Management’s managing director and head of equity product management and innovation.

Schwab Launches Its First Crypto-related ETF—the Schwab Crypto Thematic ETF https://t.co/iVkCYdNUQwpic.twitter.com/18rJUZ3phy

— Charles Schwab Corp (@CharlesSchwab) July 29, 2022

The anticipated launch of the crypto-linked ETF followed the firm announcing a Crypto Economy ETF in March. According to Schwab, the exposure to companies dealing in cryptocurrencies between the two funds would be similar — while the former would track the firm’s Crypto Thematic Index, the latter would invest “at least 80% of its net assets” for companies listed on its Crypto Economy Index.

Related: Grayscale reports 99% of SEC comment letters support spot Bitcoin ETF

The SEC has not approved spot Bitcoin ETFs — those directly investing in the cryptocurrency — in the United States. However, some asset management firms in the U.S. have launched ETFs offering indirect exposure to crypto through futures contracts, and Canadian regulators first approved a Bitcoin spot ETF from Purpose Investments in February 2021.