In brief
- GSR Digital Asset Treasury Companies ETF will invest at least 80% of its assets in firms that hold cryptocurrencies in their corporate treasuries.
- The market maker’s registration statement to the SEC included proposals for four other funds that would focus primarily on Ethereum and staking.
- London-based GSR recently opened a U.S. asset management unit.
Crypto trading firm GSR has applied for an exchange-traded fund based on the performance of cryptocurrency treasuries, according to a Wednesday filing with the U.S. Securities and Exchange Commission that included proposals for four other funds focused on Ethereum and staking.
The GSR Digital Asset Treasury Companies ETF will invest at least 80% of its assets in firms that hold cryptocurrencies in their corporate treasuries, according to the N-1A registration statement. The ETF, which will initially hold 10-15 positions, will target companies listed on U.S. stock exchanges, although it may also include private investments in public equity (PIPE).
PIPEs are privately settled transactions, enabling accredited investors to purchase stock shares directly from a listed company, usually at a market price discount.
GSR’s proposal, its first for ETFs, follows a spring and summertime surge in cryptocurrency treasuries. These recent initiatives have expanded the phenomenon from its Bitcoin roots in 2020 with MicroStrategy’s (now Strategy) strategic shift from software development, to encompasses treasuries built on Ethereum, Solana, XRP and TON, among other tokens.
In its filing, GSR listed Strategy, which holds about 640,000 Bitcoin with a current value of nearly $73 billion, Ethereum treasuries Bitmine Immersion and SharpLink and SUI Group Holdings as examples of treasury companies.
London-based GSR, which offers market making, venture capital and over the counter trading services, had recently added a U.S. asset management division as it looked to expand its participation in the digital assets space. In April, GSR led a $100 million funding round for Nasdaq traded consumer products company Upexi to build a Solana treasury.
GSR’s latest submission also covered the GSR Ethereum Staking Opportunity, the GSR Crypto StakingMax, the GSR Crypto Core3, and GSR Ethereum YieldEdge ETFs. The Core3 fund will focus on Bitcoin, ETH and Solana, plus staking rewards.
In recent months, issuers have applied for a widening array of crypto ETFs based on various altcoins, combinations of tokens and strategies. As of late August, the SEC was weighing submissions for more than 90 of these products, according to Bloomberg research.
Their odds of approval received a boost last week when the regulator signed off on new generic listing standards for commodity-based trusts, easing the approval process. The agency’s thumbs-up underscored the more receptive regulatory and political environment that has emboldened issuers.
Last Thursday, Grayscale’s Digital Large Cap Fund (GDLC), which tracks XRP, Solana, and Cardano—along with Bitcoin and Ethereum–and the Rex-Osprey DOGE ETF (DOJE) began trading a day after garnering SEC approval. The same day, Tidal Financial Group filed an application for a Quantify 2X Daily AltAlt Season Crypto ETF, which would be based on several altcoins but excludes Bitcoin and Ethereum, and two other funds.
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