Multinational financial services company Charles Schwab is set to launch its first crypto-themed ETF on the New York Stock Exchange (NYSE). The ETF expects to be launched in the coming week, according to a prospectus filed with the United States Securities and Exchange (SEC) Commission on July 29.1
The ETF will be available under the ticker STCE and will not directly invest in crypto. Rather, it will offer exposure to the crypto ecosystem via companies “that use digital assets as part of their business activities, or that hold digital assets as proprietary investments, or through other non-principal investments held by the fund.”
The fund will invest up to 20% of its net assets in securities not included in the index. Charles Schwab claims that this is one of the lowest-cost crypto-related ETFs available to investors, at an annual operating expense of 0.30%. Other ETFs do, in fact, charge a higher commission. For example, the VanEck ETF charges 0.50%.2
The decision to launch a crypto-themed ETF is a sharp change for Charles Schwab, whose CEO Walt Bettinger has been hesitant about crypto. However, in January 2022, the CEO said that cryptocurrencies were “hard to ignore.”3 Bettinger also said that he was looking for regulatory clarity last year — and that’s something the U.S. has been working on.
There are well over a dozen crypto ETFs available in the U.S. at the moment, and that list continues to grow. One conspicuous absence is a spot bitcoin ETF, which the U.S. SEC has been reluctant to approve.4
The SEC believes that the market needs better investor protection and market manipulation prevention measures before it gains a spot crypto ETF. Having said that, the SEC is playing a major role in this discussion and is set to have a heavy impact on how the crypto market operates.