BlockFi, Neuberger Berman form new business to build crypto ETFs and other funds

BlockFi, Neuberger Berman form new business to build crypto ETFs and other funds

Crypto financial services firm BlockFi has teamed up with investment manager Neuberger Berman to create a business for crypto products including exchange-traded funds (ETFs).

“BlockFi | nb expects to launch crypto asset management products, including ETFs and other traditional structures, that will give investors cost-effective and convenient access to the performance of crypto assets in their brokerage accounts,” the two companies said Monday.

BlockFi | nb is located in Jersey City, N.J., a BlockFi spokesperson confirmed, noting that a “small” group of people is working for the company and that it "receives support and services from its parent entities." Expansion plans are on the horizon, the spokesperson said, without sharing further details about how many and what type of new positions would be available.

The new legal entity is launching as crypto ETFs continue to gain popularity. BlockFi is just one of the issuers hoping to list its own in the U.S., following the launch of the ProShares Bitcoin Strategy ETF (BITO) on Oct. 19. That fund, the first exchange-traded product based on crypto futures to list on a U.S. exchange, saw nearly $1 billion in volumes on its first day.

Shortly after, Valkyrie launched a bitcoin futures ETF that did nearly $80 million in volume on its launch day.

BlockFi filed a form N-1A with the U.S. Securities and Exchange Commission (SEC) on Oct. 8 to offer the BlockFi Bitcoin Strategy ETF, an actively managed fund that would mostly invest in bitcoin futures contracts registered with the Commodity Futures Trading Commission (CFTC) without direct exposure to the cryptocurrency. The fund would be approved 75 days after that date, so long as the regulator doesn’t take any action to block the product before that time.

“Digital assets are increasingly taking their place as mainstream investments and we intend for BlockFi | nb to play a key role in that effort,” Peter Sterling, managing director at Neuberger Berman, said in a press release.

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