Exchange Traded Concepts, a private-label ETF issuer, plans to launch an ETF targeting NFT companies, and this will be an index-tracking ETF.
Exchange-Traded Concepts
Exchange Traded Concepts is an integral player in the NFT space, and over the last six months, they’ve designed and launched a few ETFs aimed at the NFT space. In October 2021, Exchange Traded Concepts debuted its Fount Metaverse ETF to critical acclaim.
Crypto and NFT-related investments have exploded in popularity in recent times, and it seems like there’s at least one new entrant to this space weekly. The Securities and Exchanges Commission in the USA has approved registering a reasonable amount of crypto-related ETFs in the last twelve months. Still, one thing that’s been shunned is ETFs investing directly in Bitcoin. As of 12 March 2022, the SEC is yet to approve any ETFs that’ll invest in Bitcoin.
As mentioned a few moments ago, Exchange Traded Concepts debuted its Fount Metaverse ETF (MTVR) in October 2021, and since its launch, the fund has grown to manage about $11 million worth of assets. The latest ETF from this company is an index-tracking ETF that will invest in NFT companies within the industry; companies involved in entertainment, arts, and gaming will be focused on with this ETF.
According to a regulatory disclosure on Thursday, 12 March 2022, the ETF tracks a Fount Investment Company Index. It is designed to follow the performance of businesses that play critical roles in the token technology sub-industry.
How will the new ETF operate?
According to an Exchange Traded Concepts report disclosure, NFTs are an excellent avenue for people to enjoy, collect, and trade digital artworks. Exchange Traded Concepts expects NFTs to “significantly alter traditional business models operated within the gaming industry.”
This new ETF is coming at a critical time when they are being launched to take advantage of the positives of the US Presidents’ executive order on Crypto and related assets.
In terms of companies to be included in the index, the Exchange Traded Concepts filing shared the following, “Each token economy company’s one year forecasted revenue is reviewed, and only companies that are expected to derive more than 50% of their revenue from a token technology sub-industry may be included in the index.”
2022 promises to be an exciting year for NFT-related ETFs, and a big part of this excitement is generated from recent regulatory changes in the US.
How will Biden’s Executive Order affect Bitcoin ETFs?
The recent executive order by the USA president focuses on crypto policy related to risk mitigation, financial stability, consumer protection, the US’ financial leadership, future innovations, and financial inclusion. The executive order is far from perfect, but it’s a welcomed development as it sets a unified framework for government regulation of Crypto. This can reduce bureaucratic red-tape, possibly ushering the first set of Bitcoin ETF issuers. Hopefully, the SEC will approve the first Bitcoin ETF before the end of the year.
