Cinthia Murphy, Managing Editor of ETF.com, joins Yahoo Finance to discuss crypto themes in the ETF space.
ALEXIS CHRISTOFOROUS: Let’s welcome in Cinthia Murphy. She’s managing editor at ETF.com. So Cinthia, you see two major themes, I guess, here in the ETF space. You see ESG and crypto. I want to start, though, with cryptocurrencies. They’ve been coming under pressure. We saw that flash crash with Bitcoin. Do you think that a Bitcoin futures ETF is going to happen sooner rather than later?
CINTHIA MURPHY: Hi, Alexis. Yeah, these are definitely two hot-button topics, if you will, ESG and crypto. And the crypto space, and we’ve been waiting for a Bitcoin ETF to come to the US market for a long time, they already exists elsewhere, including in Canada. And we have yet to have approval one launch in the US.
I think the clock is really ticking now because the SEC has really shown, you know, a willingness to have a conversation about at least a futures-based Bitcoin ETF. And there are several in registration waiting for that rubber-stamp approval. And some of them, I mean, we’re expected to hear from the SEC as early as end of this month. So it could be that by the end of September, we have a futures-based Bitcoin ETF approved, which would unleash a whole roster of them that are already in registration coming to market.
And in theory, we do have Bitcoin futures trading in the Chicago [? Mercan 2 ?] Exchange already. They’ve done that for a couple of years. So there’s not a lot of room here to argue that, you know, there’s not enough regulation, there’s not enough oversight. All these concerns we have about crypto, the futures contracts exist. And they trade every day and they’re liquid and they’re working. So it’d be kind of really interesting to see whether the SEC has no choice but to say yes and see what happens. And we’ll see what that does to the market.
ALEXIS CHRISTOFOROUS: And look, there is no pure play you know cryptocurrency ETF right now for people to invest in. But talk to me about those ancillary assets. I mean, like blockchain ETFs and what has the response been there. Because at least that’s a way for investors to have exposure to cryptocurrencies in the ETF space.
CINTHIA MURPHY: Yeah, for a long time blockchain ETFs have been kind of like an indirect vector to play the crypto space in the absence of just going out, flat-out buying you Bitcoin. And they have attracted a lot of assets. They’ve done really well. There’s really four or five big plays here. The biggest one, BLOK, B-L-O-K, is a really interesting play and the one that gets the most action because, if you look at the portfolio, it’s the only fund that also used to include Bitcoin itself.
So initially, it achieved that exposure by owning the Grayscale Bitcoin Trust. And now if you look at the portfolio today, it actually no longer holds you [? GBTC, ?] it holds the three Canadian physical Bitcoin ETFs in the portfolio. So it is a blockchain ETF, so you’re really investing in the technology behind crypto. But you have direct exposure to crypto in there because it owns three Bitcoin ETFs in that portfolio. So it’s been a really favored way to access this space for investors who are not comfortable just going out and buying Bitcoin themselves and putting in their account.
BLOK has been a very popular way to gain access there. It’s picked up another $100 million this year. It’s up 40% this year. So it’s a fund that’s doing really well because it navigates this line between the technology powering it to the future of the disruption in that side of the story. And it also offers a direct exposure to the crypto itself, to Bitcoin, through these Canadian funds.
ALEXIS CHRISTOFOROUS: All right. Look, we’re going to have to leave it there. We’re going to have to leave the ESG conversation to the next time, Cinthia. All right. But thanks a lot for stopping by. Cinthia Murphy of ETF.com.