GSR has taken a significant step in the cryptocurrency investment landscape by submitting filings for five crypto-focused exchange-traded funds (ETFs) to the Securities and Exchange Commission. The filing, dated September 24, is aimed at tracking the performance of digital asset treasury companies and Ethereum staking.
One of the primary offerings, the Digital Asset Treasury Companies ETF, is designed to achieve total returns by investing in equity securities of companies that hold considerable digital assets in their corporate treasuries. The fund plans to allocate at least 80% of its assets to these designated digital asset treasury companies. The advisor outlines eligible companies as those maintaining a substantial portion of their portfolios in cryptocurrencies. The ETF anticipates holding around 10 to 15 positions, primarily focused on US-listed securities, including 5 to 10 issuers. Importantly, this strategy avoids direct exposure to cryptocurrencies, opting instead to capitalize on the performance of companies employing crypto treasury strategies. Examples of companies whose stocks may be included in the ETF are Strategy, Upexi, DeFi Development Corp, and CEA Industries.
In addition to the Digital Asset Treasury Companies ETF, GSR is introducing four Ethereum-centered ETFs that target various aspects of staking rewards and yield generation. The GSR Ethereum Staking Opportunity ETF aims to replicate the performance of Ethereum, including any staking rewards associated with it. Meanwhile, the GSR Crypto StakingMax ETF seeks capital appreciation through investments in cryptocurrencies utilizing proof-of-stake consensus mechanisms. The GSR Crypto Core3 ETF offers a balanced approach by equally allocating approximately 33% of its assets to Bitcoin, Ethereum, and Solana. Additionally, the GSR Ethereum YieldEdge ETF combines exposure to Ethereum staking with derivatives to enhance yields.
Each of the new funds is designed to maintain daily liquidity while maximizing staking participation, with portfolio management ensuring that no more than 15% of the assets are illiquid, adhering to Rule 22e-4 requirements.
The timing of GSR’s filings coincides with the recent approval of generic listing standards for commodity-based trust shares by the SEC, applicable across major exchanges such as Nasdaq, Cboe, and the New York Stock Exchange. These new standards are expected to streamline the approval process for exchange-traded products linked to digital assets, potentially shortening review periods from as long as 240 days to a more efficient 60-75 days for qualifying products. However, it’s essential to note that the generic standards do not guarantee approval for all crypto exchange-traded products, as certain threshold requirements must still be met.
This development comes amidst a resurgence in institutional interest in cryptocurrency exposure vehicles, highlighted by a 25 basis point cut in US interest rates that has driven $1.9 billion into crypto exchange-traded products, signaling a renewed confidence in the digital asset market.
