State Street’s asset management arm, State Street Global Advisors (SSGA AUM $4.3 trillion), has partnered with Galaxy Asset Management to collaborate on digital assets. Together they plan to launch ETFs that provide investment strategies involving exposure to companies in the digital asset sector, “going beyond cryptocurrencies and bitcoin.” Galaxy already has a spot Bitcoin ETF in conjunction with Invesco.
“We believe that the digital assets landscape is so much more than the single crypto components and that crypto native companies are best equipped to understand that ecosystem and its correlation with financial markets,” said Anna Paglia, Chief Business Officer at State Street Global Advisors.
“We are pleased to be working with Galaxy to educate investors about the role digital assets can play in a diversified portfolio, and provide the opportunity to participate in the next level of growth and innovation for the digital asset ecosystem.”
This is a big win for GAM, the affiliate of Galaxy Digital. Apart from GAM’s relationship with Invesco, Galaxy Digital also has a deal in Europe with Deutsche Bank’s asset management arm DWS. Additionally, it has a series of crypto indices in partnership with Bloomberg.
State Street used the opportunity to note that State Street Bank and Trust would provide administrative and accounting services for the new ETFs. It provides similar services for three of the Spot Bitcoin ETFs launched in January, as well as playing roles in European ETFs and Australia’s inaugural spot Bitcoin ETF.
The digital asset custody challenge
While the company has been developing digital asset custody services as part of State Street Digital, the SEC’s accounting rule SAB 121 has prevented the big U.S. custodian banks from providing custody services. By contrast, Zodia Custody, is picking up significant custody work outside the United States. It’s backed by Standard Chartered’s SC Ventures, Northern Trust, SBI and National Australia Bank.
