Invesco & Galaxy Digital Partner To Develop Crypto ETFs

Invesco and Galaxy Digital announced this week that they would be teaming up to develop a suite of U.S.-listed, physically backed digital asset ETFs. The partnership brings together the U.S.’ fourth-biggest exchange-traded product issuer in Invesco and an up-and-coming crypto-focused financial services firm in Galaxy.

“Invesco has a long history of using ETFs to democratize investor access to disruptive, innovative asset classes. Now, through our partnership with market leader Galaxy Digital, we are able to incorporate their expertise of blockchain technology, digital assets and cryptocurrency into our product capabilities,” said John Hoffman, head of Americas, ETFs & Indexed Strategies at Invesco. “This combination of complementary strengths will help clients safely and prudently navigate this exciting new asset class to help meet their desired investment outcomes.”

"Galaxy Digital is laser-focused on helping investors safely and efficiently access this burgeoning asset class,” added Steve Kurz, head of Asset Management at Galaxy Digital. “Our partnership with Invesco, a longstanding ETF innovator, will bring the same thoughtful approach to educating investors about digital assets as Invesco has brought to the ETF industry itself."

(See our bitcoin report for key facts and metrics on the cryptocurrency)

Invesco currently has $471 billion in assets under management globally, including $369 billion in U.S.-listed ETFs. Galaxy Digital’s asset management arm has $2.1 billion in AUM.

The combination of Invesco and Galaxy could be a strong force in the nascent crypto ETF space—but it could be a while before anything comes from the partnership.  So far, the SEC has prevented cryptocurrency ETFs from listing in the U.S., though expectations are growing that the SEC could soon approve the first futures-based bitcoin ETF in the country.

Such an ETF would fall outside of the scope of the Invesco/Galaxy partnership, which will focus on “physically backed” digital asset ETFs, or those that own cryptocurrencies like bitcoin and ether directly.

It remains to be seen when, if ever, the SEC will greenlight a physically backed digital asset ETF. Outside of the U.S., regulators have been more permissive.     

Earlier this year, Canada allowed the first bitcoin and ether ETFs to trade in that country, including the CI Galaxy Bitcoin ETF and the CI Galaxy Ethereum ETF, which are subadvised by Galaxy Digital. As subadvisor, Galaxy Digital executes bitcoin trading on behalf of the Canadian ETFs.

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