Here’s What Unique In The Recent S&P 500 And Bitcoin ETF, Filed By A New Digital Asset Manager

A new digital asset manager files for an ETF that aims at the S&P 500 Index exposure and also offers limited access to Bitcoin for the first time.

Michael Willis, hired for the ETF’s portfolio manager, believes Bitcoin is volatile and the S&P 500 exposure will provide more stability to a Bitcoin portfolio.

The Digital Funds founder says he anticipates the digital assets to “replace the financial legacy system.”

An ETF that aims to provide exposure to the S&P 500 Index while also offering limited access to Bitcoin is filed by a new digital asset manager.

According to a March 11 regulatory disclosure, the Digital Funds S&P 500 Bitcoin 75/25 Index ET will invest about 25% of its assets in bitcoin futures contracts and around 75% of its assets in large US companies within the S&P 500 Index.

The filing further states that the fund may invest through bitcoin ETFs trading in other countries or the Grayscale Bitcoin Trust (GBTC), looking at the unusual conditions in the market. It does not invest directly in Bitcoin.

Michael Willis, who will be serving as the portfolio manager at the ETF, says the flagship currency is quite volatile, pointing out that the S&P 500 exposure offers more stability to a Bitcoin portfolio.

Nathan Geraci, president of The ETF Store, commented that historically looking at a small allocation to Bitcoin has often enhanced the risk/return characteristics of a diversified portfolio. Appropriate position sizing and disciplined rebalancing are essential for realizing the potential benefits considering the volatility of bitcoin.

Geraci gave a green signal to the proposed ETF of Digital Funds to Simplify ETFs’ US Equity PLUS GBTC ETF (SPBC) that can assign up to 15% in GBTC.

Further, Geraci said he believes that there is a limited audience for such products since most advisers and investors are attracted towards a standalone allocation to bitcoin. Geraci adds that the ETFs with various asset classes usually have “an uphill climb to success.”

The Digital Funds Founder Says Digital Assets Are The Future

Willis said in a statement the products of Digital Funds would be prioritizing digital asset investment. The company also intends to file for a few other products, including a spot bitcoin ETF.

Although the Securities and Exchange Commission allows investing in Bitcoin futures contracts to launch an ETF, but yet not approved an ETF that would invest directly in bitcoin, Willis also does not await the agency to approve a spot bitcoin ETF.

However, Willis does anticipate that the digitals assets will “replace the financial legacy system”. He further forecasts that a series of regulated digital investment products will soon be entering the space, although the first $2 trillion something assets were mostly unregulated.

Moreover, he says that the consumers already have an immediate settlement, 24/7 trading, and programmable tokens. Willis argues that “it’s the future”; however, there is demand for a safe and secure way to get into that space. “All of our products will be registered with the SEC, and we think that’s the key to unlocking the larger assets,” he adds.

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Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing