The fight for a crypto-based exchange-traded fund (ETF) continues, and it appears that Charles Schwab, one of the world’s largest financial organizations, is getting involved and scoring a few points in the process.
Charles Schwab Is Getting Into Cryptocurrency
Charles Schwab Asset Management recently unveiled plans for the Schwab Crypto Thematic ETF (STCE). The program will provide investors and clients with indirect exposure to crypto assets. According to Charles Schwab, many of its customers have recently demanded expanded access to digital currencies, and this is the bank’s attempt to oblige regardless of current (bad) market patterns.
David Botset, who was personally involved in the product’s debut, explained in a statement:
It is a very speculative investment, but we are seeing certain segments of Schwab investors that are seeking access to this asset category in their portfolios.
For the longest time, crypto investors have put pressure on institutions to launch new crypto-based ETFs, believing that bitcoin is considerably more stable and has potential for growth than other commodities (such as copper) on which current ETFs are based. While many companies have attempted to make this happen, the route has been littered with roadblocks, the most significant of which is the Securities and Exchange Commission (SEC).
The SEC has frequently dismissed applications from companies seeking to establish bitcoin-based ETFs, alleging that the asset is too volatile to justify serious consideration. The SEC claims that limiting clients’ opportunities to participate in BTC, is helping them, but many traders disagree.
A bitcoin-based ETF has been launched to some extent by a business named Pro Shares. While the product has received positive feedback, many believe it is not as robust as it could be because it is based on futures rather than actual, tangible bitcoins that can be exchanged in real-time.
Botset went on to say:
The Schwab Crypto Thematic ETF is different from other crypto-related ETFs on the market today in the way that the index identifies, selects, and weighs constituents based on a company’s relevance to the crypto ecosystem using natural language processing.
At the time of writing, several of the world’s greatest crypto names had invested in the product, including MicroStrategy, Robinhood, Riot Blockchain, Coinbase, and Marathon Digital. Botset noted how inexpensive the product is, saying:
Our approach of combining human insight with AI and models to assess companies’ exposure to the crypto theme, we think, is differentiated.
The product is doing well.
The aim of keeping expenses low is to allow small businesses to participate in trading.
The product has increased by approximately 5% since its original launch early last month.