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T. Rowe Price's ( TROW ) first crypto ETF targets multiple digital

currencies

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ETF aims to outperform FTSE Crypto US Listed Index

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Government shutdown will stall crypto ETF approvals

By Suzanne McGee and Arasu Kannagi Basil

Oct 22 (Reuters) - T. Rowe Price ( TROW ) is seeking

regulatory approval to launch an actively managed

exchange-traded fund tied to multiple digital currencies,

according to a filing with the U.S. Securities and Exchange

Commission on Wednesday.

It is the first foray into the cryptocurrency space by the $1.77

trillion asset management firm, nearly two years after the SEC's

approval of spot bitcoin ETFs.

"It's a surprise to see them as a relatively late entrant,

but they're planning to offer something differentiated to try

and break into the space," said Bryan Armour, an ETF analyst at

Morningstar.

While asset managers have flooded the SEC with applications

to launch ETFs tied to individual coins, it remains rare to see

proposals for new multi-coin products that are actively managed,

Armour added.

The proposed ETF would offer investors exposure to anywhere

from five to 15 coins that meet the fund's eligibility

standards, a list that currently ranges from bitcoin and ether

to solana, dogecoin and Shiba Inu, according to the prospectus.

Managers would seek to outperform the FTSE Crypto US Listed

Index and use fundamental, valuation and momentum factors to

determine which assets to hold and their relative weights within

the portfolio, a spokesman told Reuters.

As outflows continue from its traditional mutual funds, T. Rowe

Price ( TROW ) has been seeking to diversify into new areas, Armour said.

It has launched 24 ETFs in recent years, and last month

announced a new partnership with Goldman Sachs ( GS ) to explore

ways to develop new private market products for retail

investors. As part of that agreement, Goldman said it will buy

up to 3.5% of T. Rowe shares, an investment that could top $1

billion.

"This is a firm looking for new niches," said Armour.

T. Rowe Price ( TROW ) has been monitoring developments in the

digital assets space closely and developed the ability to trade

digital assets in recent years, the firm's spokesman said. In

2022, it hired Blue Macellari, a former crypto hedge fund

executive, to become head of its digital assets strategy.

"It's exciting to see them expand their ETF lineup beyond

stock and bond exposure," said Todd Rosenbluth, head of research

at VettaFi, an ETF market analysis firm.

Scores of cryptocurrency ETFs await SEC approval in the midst of

a government shutdown that has reduced the agency's staffing to

skeletal levels. They are unlikely to get the green light until

the shutdown ends, in spite of the SEC's adoption of new listing

standards clearing the way for a host of new products such as

the T. Rowe Price ETF.