Capital markets News

Schwab files to launch a crypto ETF

charles schwab

Yesterday the Schwab Strategic Trust filed an SEC prospectus for a Schwab Crypto Economy ETF. With its association with the Charles Schwab brand, this would be another step into the crypto space by a major incumbent. 

It plans to create the Schwab Crypto Economy Index on which the ETF would be based. The index would include listed stocks in the cryptocurrency sector, including exchanges, those doing cryptocurrency mining or staking, and developing applications using blockchain or crypto.

It certainly wouldn’t be the first such ETF, but it might be the first by such a mainstream name if it proceeds. In July last year, Goldman Sachs also filed an ETF prospectus but has not yet issued one for crypto.

Other big names in retail investment, such as Fidelity, have been involved in the crypto sector for years, although not for ETFs. And of course, Robinhood offers crypto exposure. But there is still hesitance from some incumbents about getting involved.

For example, in mid-November last year, a Schwab blog post concluded that “While some traders have made money on the change in price of Bitcoin or other cryptocurrencies (and others have lost money), we suggest that most investors treat them as a speculative asset primarily for trading with money outside a traditional long-term portfolio.”

Vanguard, the biggest ETF issuer, is even more wary. In September it wrote, “Since cryptocurrencies are highly speculative in their current state, Vanguard believes their long-term investment case is weak.”

But a couple of months is a long time in the crypto sector, so the situation can rapidly evolve. 

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