T. Rowe Price, a prominent asset manager with an impressive $1.77 trillion in assets under management, has taken a bold step into the cryptocurrency realm by filing for its inaugural crypto exchange-traded fund (ETF). Established in 1937, this firm is set to launch the T. Rowe Price Active Crypto ETF, a move that has caught the attention of market analysts and investors alike.
The application, submitted to the Securities and Exchange Commission (SEC), proposes an actively managed fund that will encompass a diverse range of 5 to 15 cryptocurrencies. Among the eligible assets are popular names such as Bitcoin, Ethereum, Solana, XRP, and several others that meet SEC standards. This strategic choice aims to position the fund to outperform the FTSE Crypto US Listed Index by leveraging a unique asset weight strategy based on fundamentals, valuation, and market momentum rather than merely market capitalization.
This shift has surprised many in the finance sector, considering T. Rowe Price’s long-standing focus on mutual funds throughout its 87-year history. Notably, the firm’s previous caution regarding cryptocurrencies, articulated by former CEO William Stromberg in 2021, emphasized that the crypto space was still in its early days and would require time to mature. Eric Balchunas, an ETF analyst, described the filing as a “SEMI-SHOCK,” and Nate Geraci, president of NovaDius Wealth Management, remarked that the decision seemed to come from “left field.”
The fund aims to navigate the complexities of crypto asset management, requiring T. Rowe Price to establish comprehensive infrastructure for crypto trading from the ground up. This involves building systems capable of managing a crypto ETF, a task that legacy asset managers are increasingly undertaking as they integrate cryptocurrencies into their investment strategies.
Legacy Firms Enter Crypto Space
T. Rowe Price’s entry into the crypto ETF market follows in the footsteps of other established financial institutions like BlackRock and Fidelity, who have already launched successful crypto ETFs. However, T. Rowe’s timing comes several years after these first movers captured significant market share.
In contrast to the multiple individual cryptocurrency ETFs waiting for SEC approval, T. Rowe Price’s application offers a diversified approach. Other firms have proposed single-coin ETFs for cryptocurrencies such as Litecoin and Solana, but T. Rowe Price’s strategy aims to encompass a broader spectrum of digital assets.
Government Shutdown Delays Processing
Despite the excitement surrounding this new fund, the ongoing U.S. government shutdown has cast a shadow over the application process. Since October 1, the shutdown has halted the SEC’s processing of all crypto ETF applications, including T. Rowe Price’s. The SEC recently approved new listing standards intended to expedite the timeline for crypto ETFs, but the shutdown has temporarily stalled progress.
Economic adviser Kevin Hassett has indicated that the shutdown may conclude soon, which would allow the SEC to resume normal operations and begin processing the backlog of applications. Until then, T. Rowe Price’s application remains in limbo, awaiting the green light to proceed into the burgeoning world of cryptocurrency investments.
