T. Rowe Price Seeks Approval for Active Crypto ETF, Manages $1.8T in Assets

Key Points

• T. Rowe Price, an investment firm managing over $1.8 trillion in assets, plans to launch its first cryptocurrency-focused ETF.
• The firm’s ETF will be actively managed and aims to outperform the FTSE Crypto US Listed Index.

T. Rowe Price, an investment firm with 87 years of experience and over $1.8 trillion in assets under management, is making its debut in the digital asset market.

The Baltimore-based asset manager has submitted an S-1 registration statement with the US Securities and Exchange Commission (SEC) to launch its first cryptocurrency-focused exchange-traded fund, the T. Rowe Price Active Crypto ETF.

ETF Composition and Strategy

The ETF is set to be actively managed, providing exposure to a selection of 5–15 cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Solana, Dogecoin, and Shiba Inu.

The fund’s objective is to outperform the FTSE Crypto US Listed Index. It plans to achieve this by using a combination of fundamental, valuation, and momentum factors to decide on holdings and their respective weights.

Unlike spot ETFs that merely track an index, T. Rowe Price’s active strategy allows its managers to adjust positions dynamically. This enables them to shift between coins based on market conditions, giving the fund the flexibility to navigate volatile markets and potentially outperform passive benchmarks.

Industry Impact and Broader ETF Momentum

Analysts have noted the significance of T. Rowe Price’s entry into the crypto space. Bryan Armour, an ETF analyst at Morningstar, said that multi-coin, actively managed crypto ETFs are still rare, making T. Rowe Price’s offering a unique addition to the market.

The firm’s filing also indicates its increasing commitment to digital assets. In 2022, T. Rowe Price hired former crypto hedge fund executive Blue Macellari as head of digital asset strategy, signaling its ambition to expand beyond traditional stocks and bonds.

In the meantime, over 150 applications for crypto-focused ETFs are awaiting SEC approval. These include new products from renowned firms like VanEck, BlackRock, and Fidelity.

Despite the ongoing US government shutdown, regulatory progress for crypto funds has accelerated following the SEC’s approval of generic listing standards for commodity-based ETFs. This has reduced the waiting period for crypto funds to go live. However, with limited staffing due to the shutdown, the agency is unlikely to process crypto ETF filings until the government reopens.

Nate Geraci, president of NovaDius Wealth Management, highlighted the significance of T. Rowe Price’s move. He noted that the firm, founded in 1937, is now building a full infrastructure to handle crypto trading and ETF management, signaling that crypto is now an integral part of finance.