US investment firm Canary Capital has filed a new exchange-traded fund (ETF) with the Securities and Exchange Commission (SEC), which combines cryptocurrencies and NFTs in a single investment product.
The proposed fund Canary ETF will include $pengu tokens (issued on the solana blockchain) and digital assets of Ethereum-based chunky Penguin NFT collection, the first known attempt to include NFTs in regulated U.S. ETFs.
The SEC application was submitted Thursday, but no timeline for review or approval was provided.
Source: Luca NetzWhat is an ETF?
An exchange-traded fund (ETF) is a financial product that tracks the performance of a specific asset or a set of assets.
ETFs are traded on stock exchanges and can be bought and sold like personal stocks. They are often used to give investors access to a specific sector, commodity, or index without them directly purchasing or managing underlying assets.
In the context of cryptocurrencies, ETFs can provide contact with digital tokens without requiring investors to directly handle wallets, exchanges or custody.
Source: Igloo Inc.Why is this important?
If approved, this will be the first ETF in the United States to have NFTs as part of its portfolio. Previous digital asset ETFs (such as those tracking Bitcoin or Ethereum) only contain functional tokens.
NFTs are inherently different from cryptocurrencies’ unique properties and variable pricing. Including them in regulated investment funds presents new challenges, including how to value, store and audit such assets. The SEC has not yet issued specific guidelines for NFT-based ETFs.
Other companies, including Vaneck and Bitwise, have submitted recommendations for ETFs related to cryptocurrencies such as Solana, Litecoin and XRP.
