State Street Global Advisors has announced a partnership with Galaxy Digital to introduce new exchange-traded funds (ETFs) that extend beyond the traditional spot Bitcoin offerings. This collaboration aims to cater to the growing interest in digital assets from both institutional and retail investors.
Expanding Beyond Spot Bitcoin ETFs
In recent statements, State Street and Galaxy Digital have indicated that these upcoming ETFs will diversify the exposure beyond just spot Bitcoin. The $4.1 trillion asset manager, State Street, emphasized in a June 26 announcement the rising demand for digital asset investment options beyond pure spot Bitcoin.
“Institutional and retail interest in digital assets has surged since the introduction of spot Bitcoin ETFs. However, investors are also seeking exposure to this growing asset class through investment options beyond pure spot Bitcoin,” the company stated. “We believe this is where the next level of growth is for the digital asset ecosystem.”
Proposed New ETFs
State Street has proposed several new ETFs to the United States Securities and Exchange Commission (SEC). These include the SPDR Galaxy Digital Asset Ecosystem ETF, which will invest in publicly-traded digital asset firms such as crypto exchanges, mining companies, hardware wallet providers, and crypto-focused venture capital firms both in the U.S. and internationally. Additionally, this fund will invest in futures and spot ETF products.
Other proposed ETFs include the SPDR Galaxy Emerging Technology Enablers ETF and the Hedged Digital Asset Ecosystem ETF.
Industry Reactions
The news has generated positive responses from industry leaders. Viska Digital Assets CEO Dadi Kristjansson remarked on the increasing mainstream acceptance of crypto assets, describing the development as “bullish.” Nate Geraci, President of the ETF Store, called the move “noteworthy” but expressed surprise that State Street did not fully commit to spot Bitcoin and Ether ETFs.
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State Street’s Continued Involvement in Digital Assets
State Street Bank and Trust is set to provide administrative and accounting services for the new digital asset ETFs developed in partnership with Galaxy Digital. State Street’s involvement in the digital asset space dates back to at least June 2021, when it established a dedicated digital asset division. Despite this, SSGA has not been among the recent applicants for spot Bitcoin or Ether ETFs.
Growing Interest in Spot Bitcoin ETFs
Since their launch five and a half months ago, U.S. spot Bitcoin ETFs issued by some of State Street’s largest competitors have attracted over $14.4 billion in flows, according to Farside Investor data. This surge in interest highlights the potential for growth in the digital asset ecosystem as investors seek more diversified exposure.
