Ben Strack

<div id="highlights-block_6261cfa696fa6" class="highlights">
 <ul>
 <li>Simplify Asset Management CEO Paul Kim says bitcoin is increasingly becoming an “important exposure”</li>
 <li>The company last year launched an ETF that includes a 10% allocation to the Grayscale Bitcoin Trust and filed in January to launch a Web3 fund</li>
 </ul>
 
</div>



ETF firm Simplify Asset Management is looking to expand its crypto-related offerings.



The New York-based firm proposed to launch the Simplify Bitcoin Strategy Risk-Managed Income ETF (MAXI), according to a Wednesday <a href="https://www.sec.gov/Archives/edgar/data/1810747/000182912622008428/simplifyexchange_485apos.htm" target="_blank" rel="noreferrer noopener">regulatory disclosure</a>. It would carry an expense ratio of 97 basis points, the filing notes.



The fund would invest in standardized, cash-settled bitcoin futures contracts traded on commodity exchanges registered with the Commodity Futures Trading Commission, such as the Chicago Mercantile Exchange (CME).



The planned offering’s option overlay strategy consists of purchasing exchange-traded protective put options and writing exchange-traded call options on bitcoin futures or bitcoin-related ETFs.



MAXI would also invest in US Treasury securities and ETFs that invest in them.



Paul Kim, Simplify’s co-founder and CEO, called bitcoin and crypto “important exposures.”&nbsp;



“If people are investing time, resources and careers into building an industry or a market, de facto it’s an important industry or market,” he told Blockworks. “Even a purely passive market investor may want to at least get off zero and have a little bit of a position in there.”



Though personally not very invested in crypto, he said, he believes investors should be “cautiously optimistic” about the space.&nbsp;



“Given all the geopolitical and macro reasons why things like bitcoin and crypto can be important, I think it’s a call option on something that could become very big,” he said.



Simplify Asset Management specializes in options-based investment strategies for advisers. It has 22 ETFs trading in the US with combined assets of roughly $1.4 billion, according to ETF.com.



The latest filing would not be Simplify’s first foray into crypto.&nbsp;



Simplify <a href="https://cms.blockworks.co/simplify-reveals-plans-to-launch-web3-etf/" target="_blank" rel="noreferrer noopener">filed in January</a> to launch an ETF focused on Web3 and metaverse companies in the US and abroad.  



The company in May 2021 launched its US Equity PLUS GBTC ETF (SPBC), which primarily invests in US equities while also offering investors a 10% exposure to bitcoin through the Grayscale Bitcoin Trust (GBTC).



Grayscale has proposed converting GBTC to an ETF, and the SEC is expected to rule on that proposal in July. The agency greenlit bitcoin futures ETFs to hit the US market last October but has continuously denied applications for spot bitcoin ETFs. 



Kim said it may take a change in administration before the SEC approves a spot bitcoin ETF.&nbsp;



“Once [the SEC] provided the bitcoin futures exposure, is the value-add so massive to approve a spot conversion or a spot ETF?” he said. “Inside the crypto industry you would say of course there is. But outside, is there really a massive difference from an investor perspective? Maybe not.”



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Simplify CEO: Investors Should Be ‘Cautiously Optimistic’ About Crypto

<div id="highlights-block_61df3a38f7de4" class="highlights">
 <ul>
 <li>Proposed fund to invest in companies focused on the shift from a centralized self-hosted hardware infrastructure to a decentralized cloud infrastructure </li>
 <li>Like the firm’s US Equity PLUS GBTC ETF (SPBC), the newly proposed fund may invest up to 10% of its assets in the Grayscale Bitcoin Trust (GBTC)</li>
 </ul>
 
</div>



Simplify ETFs is looking to launch a fund that would invest primarily in what it considers to be Web3 and metaverse companies in the US and abroad.&nbsp;



The New York-based investment firm has 16 ETFs trading in the US with combined assets of roughly $1 billion, according to ETF.com.



Simplify launched its US Equity PLUS GBTC ETF (SPBC) in May 2021. The fund, which has $114 million in assets, primarily invests in US equities while also offering investors a 10% exposure to bitcoin through the Grayscale Bitcoin Trust (GBTC).



The firm now looks to go deeper into the crypto space by launching the Simplify Volt Web3 ETF (WIII), according to <a href="https://www.sec.gov/Archives/edgar/data/1810747/000182912622000793/simplifyexchange_485apos.htm" target="_blank" rel="noreferrer noopener">a disclosure filed on Wednesday</a>. The proposed fund, which would be sub-advised by Volt Equity, is set to charge a management fee of 95 basis points, the document notes.



“Web3 companies are companies that the sub-adviser believes are focused on and expected to benefit from shifting the bases of technology infrastructure from a centralized self-hosted hardware infrastructure to a decentralized cloud infrastructure,” the filing states. “The companies will use, help others use, or significantly be reliant upon Web3 technology, which is generally verifiable, trustless, self governing and distributed and may include metaverse companies.”



The document labels metaverse companies as those helping bring a computerized virtual environment to the masses. The metaverse could play a large part in internet innovation, the filing states, as it may allow users to own pieces of digital property through NFTs or other digital tokens.



Though the planned product would not invest in cryptocurrencies directly or through the use of derivatives, the fund may invest up to 10% of its assets in the Grayscale Bitcoin Trust (GBTC).



There is no ETF in the US with Web3 in its name, but there are several focused on the metaverse. 



Roundhill Investments’ Roundhill Ball Metaverse ETF (META), which launched in June, has about $915 million in assets, ETF.com data shows. Exchange Traded Concepts launched the Fount Metaverse ETF (MTVR) in October, and that fund has about $13 million.



Fund managers <a href="https://www.sec.gov/Archives/edgar/data/0001364608/000144554621006106/etf2_485a.htm" target="_blank" rel="noreferrer noopener">First Trust</a> and <a href="https://cms.blockworks.co/proshares-files-for-metaverse-etf/" target="_blank" rel="noreferrer noopener">ProShares</a> filed for metaverse ETFs last month.&nbsp;



Lara Crigger, managing editor of ETF Trends, <a href="https://cms.blockworks.co/what-crypto-related-etfs-could-hit-the-us-market-in-2022/" target="_blank" rel="noreferrer noopener">said during a podcast earlier this month</a> that she believes the metaverse is “a little thin on the ground when it comes to investability.”&nbsp;



An executive at Simplify declined to comment beyond the filing.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.