T. Rowe Price has filed to hold a wide range of digital assets, including Bitcoin, Ether, Dogecoin and Shiba Inu, in a new exchange-traded fund (ETF).
The asset manager, which has $1.8 trillion in assets under management, filed an amended S-1 registration statement with the U.S. Securities and Exchange Commission (SEC), providing new details about its planned Price-Active Crypto ETF, a fund designed to provide investors with actively managed exposure to digital assets.
The latest filing, filed on Monday, expands on the company’s original October filing and provides an overview of the cryptocurrencies the fund may invest in, as well as details on custody, transaction structures and potential staking activities.
According to the document, the ETF may hold several digital assets, including Bitcoin. BTC$73,470.16Ether (ETH), Solana (SOL), $XRP ($XRP), ADA$0.2876Avalanche (AVAX), LTC$58.40, dot$1.5707, doge$0.1017Hedera (HBAR), BCH$478.91chain link link$9.9252Stellar Lumens (XLM), Shiba Inu (SHIB), Sui$1.0590.
Despite such a large world, a fund cannot hold all of these assets at once. Under normal circumstances, ETFs plan to maintain between 5 and 15 crypto assets at a time using active management strategies, rather than tracking a single token or passively tracking a benchmark. The portfolio will be rebalanced using a quantitative model that incorporates fundamentals, valuations and market momentum, and aims to outperform the FTSE U.S.-listed crypto index, according to the filing.
The amended application also confirmed that Anchorage Digital Bank NA will act as the fund’s crypto asset custodian and will be responsible for safeguarding the digital tokens held by the ETF.
Currently, the fund plans to use a cash subscription and redemption model, where investors will use cash to create or redeem ETF shares, rather than transferring cryptocurrencies directly. The filing notes that this structure could evolve to enable spot trading in the future, which is the model some crypto ETFs use to exchange stocks for underlying digital assets.
Another notable addition to the filing is the possibility for the fund to participate in staking. Staking is a process used by some blockchains where token holders lock up their assets to ensure the security of the network in exchange for rewards.
T. Rowe Price said staking could be promoted in the future depending on risk considerations, tax treatment and regulatory guidance.
The filing marks another step for the 87-year-old investment firm, one of the top 25 asset managers, to enter the digital asset market.
If approved, the product will join a growing list of cryptocurrency investment vehicles aimed at offering investors exposure to the sector through traditional brokerage accounts.
The fund’s aggressive approach could set it apart from the wave of spot Bitcoin ETFs set to launch in the U.S. in 2024, giving managers more flexibility to shift holdings as the crypto market evolves.
