As Schwab launches ETF this month, the company finally responds to demands from investors. The company released Schwab Crypto Thematic ETF, which is set to provide significant exposure to cryptocurrencies.
Through this ETF, investors have an indirect way to play crypto assets significantly.
According to David Botset, who was involved in the launch, “It was a very speculative investment, but we are seeing certain segments of Schwab investors that are seeking access to this asset category in their portfolios.”
An interesting note about the fund is that it doesn’t target cryptocurrencies directly. Instead, it allows investors to put funds into companies in the sector.
″[The Schwab Crypto Thematic ETF] is different than other crypto-related ETFs on the market today in the way that the index identifies, selects and weights constituents based on a company’s relevance to the crypto ecosystem using natural language processing,” Botset stated in the news release.
What’s At Play in the ETF?
Similar to other crypto-adjacent thematic products, the holdings include a broad range of familiar names.
- Interactive Brokers
- Marathon Digital
- Riot Blockchain
- Silvergate Capital
As Schwab launches ETF – Schwab Crypto Thematic ETF, it has a low-cost and index design. This sets it apart from other similar funds, according to Botset. He explained that the fund is “the lowest-cost crypto-related product in the marketplace at 30 basis points.”
For reference, a basis point is equal to 0.01 percentage point.
“Our approach of combining the human insight with AI and in models to assess companies’ exposure to the crypto theme, we think, is differentiated,” he continued.
Botset added that he believes small companies have the potential to grow through this strategy. Since the launch, the ETF is up about 5%.
Acknowledging the dramatic turbulence in the sector, Botset stated that the timing was nothing more than happenstance. Wall Street is still reeling from the crash of the past few months. However, BTC seems to be showing signs of strength.