First Trust has teamed up with SkyBridge Capital to launch an ETF that invests in companies operating in the crypto industry and broader digital economy.
Anthony Scaramucci, founder and managing partner, SkyBridge Capital.
Listed on NYSE Arca, the First Trust SkyBridge Crypto Industry and Digital Economy ETF (CRPT US) is actively managed and comes with an expense ratio of 0.85%.
It is managed by portfolio managers at SkyBridge and is principally focussed on crypto industry companies with at least 50% of assets targeting this exposure.
SkyBridge was founded by former White House Director of Communications Anthony Scaramucci.
The fund holds common stocks and ADRs of companies listed globally, including companies operating in emerging markets. Stock selection is driven by a bottom-up research process overseen by Brett Messing, President and Co-Chief Investment Officer of SkyBridge.
SkyBridge defines crypto industry companies as companies that derive at least 50% of their revenue or profits directly from goods produced or sold, investments made, or services performed in the crypto industry ecosystem and/or have at least 50% of their net assets accounted for by direct holdings of bitcoin, ether or another cryptocurrency.
The sorts of companies targeted include crypto asset mining firms, crypto mining equipment suppliers, crypto asset trading and asset management companies, and companies directly holding crypto assets on their balance sheets.
The remainder of the fund is invested in digital economy companies. In the context of the fund, SkyBridge defines digital economy companies as companies with at least 50% of their revenue or profits directly attributable to goods produced or sold, investments made, or services performed in the digital economy ecosystem. Examples include digital banks, online brokerage or trading platforms, digital payment gateways and semiconductor manufacturers.
Commenting on the launch, Scaramucci said: “We believe that cryptocurrency adoption represents the biggest macro trend since the commercialization of the internet, and we are excited to offer investors access to a portfolio of the leading companies in this ecosystem.”
Ryan Issakainen, Senior Vice President and ETF Strategist at First Trust, added: “While investors have gained some familiarity with cryptocurrencies over the past few years, we believe the full potential of digital assets is far from being realized. Rather than owning cryptocurrencies directly, this ETF seeks to benefit from the potential growth and maturity of digital assets in the years ahead by investing in companies that are involved in that ecosystem.”
The fund currently holds 30 stocks, with US-listed companies constituting 73.9% by index weight. Major positions include Coinbase (8.17%), MicroStrategy (7.33%), Marathon Digital (7.09%), Riot Blockchain (6.50%), Square (5.85%), Galaxy Digital (5.45%), Silvergate Capital (5.07%), Bitfarms (5.01%), Signature Bank (4.50%) and Robinhood Markets (4.07%).