“There is no investment case for crypto” [Advance Cash ]

“There Is No Investment Case For Crypto”

State Street Global Advisors, the world's third-largest provider of exchange-traded funds, does not believe there is a strong enough investment case to launch crypto products.

This is despite the fact that its biggest rival, BlackRock, has filed a bitcoin ETF in the United States.

“The noise about crypto was much louder two years ago. But the big question is “what is the investment case for crypto?” said Rory Tobin, global head of the SPDR ETF business at State Street Global Advisors. Financial news.

Tobin, who also heads State Street Global Advisors in Europe, the Middle East and Africa, said the asset manager had a similar challenge trying to articulate the investment case for gold. .

SPDR oversees the $59 billion SPDR Gold Shares, the world's largest gold ETF backed by physical bullion, which it launched in 2004.

READ BlackRock files for US bitcoin ETF

“In the classic world of asset allocation, people want to see a return on assets. In the case of gold, it pays no income or dividends. It's either buying or selling, so we had to develop an investment case for gold,” he said. "Finding an investment case for crypto has been difficult."

Despite his research, Tobin said State Street Global Advisors had "no immediate plans" to launch crypto products. It focuses more on how blockchain technology can be used to tokenize funds.

The comments from one of State Street Global Advisors' top executives come as rivals seek to roll out crypto-focused products.

BlackRock, the world's largest asset manager and ETF provider, filed an application with the Securities and Exchange Commission on June 15 to launch a bitcoin ETF.

Other asset managers have tried unsuccessfully to get the green light for crypto products, including VanEck, WisdomTree and Grayscale, all of which have had bitcoin ETF applications rejected by the US regulator.

According to BlackRock's filing, iShares Bitcoin Trust would use Coinbase as a custodian and track the underlying price of the cryptocurrency.

READ Fidelity remains cautious on crypto: "We're not pounding the table telling everyone to buy bitcoin"

The filing comes nearly a year after BlackRock unveiled a private bitcoin trust, which is only available to institutional clients in the United States.

The private trust, which launched in August, came after the $9 billion asset manager announced it was partnering with Coinbase Global to provide users of the Aladdin institutional management platform with BlackRock access to bitcoin.

Other asset managers in Europe are also taking a conservative approach to crypto.

Fidelity International, which launched its first bitcoin product last year, said it was in no rush to roll out more crypto products.

"We're not pounding the table by telling everyone to buy bitcoin. But if larger customers want access, now we can provide it," Christian Staub, managing director of Fidelity International's European business, told Fidelity International. FN in May.

Fidelity's Bitcoin ETP, which tracks the price of the cryptocurrency, is available to professional and institutional investors in Europe. Fidelity Digital Assets, a subsidiary of Fidelity Investments based in the United States, acts as depository for the product.

BlackRock's bitcoin app comes amid a regulatory crackdown on the crypto industry.

Coinbase, which is the largest crypto exchange in the United States, was sued by the SEC earlier this month for allegedly making “billions of dollars by illegally facilitating the buying and selling of crypto asset securities” .

The SEC alleged that the company was mixing traditional exchange, brokerage and clearing services without registering these functions, as required by US securities rules.

The US watchdog has also sued crypto trading platform Binance and its founder Changpeng Zhao for more than a dozen charges, including misuse of client funds.

Read more in FN's weekly asset management newsletter

To contact the author of this story with comments or news, email David Ricketts