US funding agency Canary Capital has filed with the Securities and Change Fee (SEC) to launch a brand new exchange-traded fund (ETF) that may mix cryptocurrency and NFTs in a single funding product.
The proposed fund Canary PENGU ETF, would come with the $PENGU token—issued on the Solana blockchain—and digital property from the Ethereum-based Pudgy Penguins NFT assortment, marking the primary identified try to incorporate NFTs in a regulated ETF in the USA.
The SEC submitting was submitted on Thursday, nevertheless it doesn’t present a timeline for assessment or approval.
What’s an ETF?
An exchange-traded fund (ETF) is a monetary product that tracks the efficiency of a particular asset or group of property.
ETFs are traded on inventory exchanges and will be purchased and offered like particular person shares. They’re usually used to provide buyers entry to particular sectors, commodities, or indexes with out requiring them to immediately buy or handle the underlying property.
Within the context of cryptocurrency, ETFs can present publicity to digital tokens with out requiring buyers to deal with wallets, exchanges, or custody immediately.
Why is that this vital?
If accredited, this is able to be the primary ETF within the US to incorporate NFTs as a part of its portfolio. Earlier digital asset ETFs—similar to these monitoring Bitcoin or Ethereum—have solely included fungible tokens.
NFTs are inherently completely different from cryptocurrencies as a result of their distinctive nature and variable pricing. Together with them in a regulated funding fund presents novel challenges, together with how one can worth, retailer, and audit such property. The SEC has but to concern particular steerage on NFT-based ETFs.
Different corporations, together with VanEck and Bitwise, have submitted proposals for ETFs tied to cryptocurrencies like Solana, Litecoin, and XRP.
