DWS, one of the largest asset managers in Europe, has partnered with cryptocurrency investment firm Galaxy Digital to develop a range of crypto Exchange-Traded Products (ETPs). The two firms will be working together to create products that will allow institutional investors to gain exposure to a range of digital assets in a regulated and secure environment.
Institutional investors have been hesitant to invest directly in cryptocurrency due to concerns about security and regulatory compliance. However, ETPs allow investors to indirectly invest in cryptocurrencies as they are backed by the underlying assets and are traded on traditional exchanges. ETPs are also regulated, making them a safer and more accessible investment vehicle for institutions.
DWS and Galaxy Digital have identified the increasing demand for crypto ETPs as more investors seek to diversify their portfolios and gain exposure to the growing cryptocurrency market. The partnership aims to capitalize on this trend and create a range of products to meet the needs of investors across Europe.
“We are excited to partner with DWS to bring more regulated and secure access to digital assets for European investors,” Michael Novogratz, CEO of Galaxy Digital, said in a press release. “We believe that DWS’s expertise in developing investment products will complement our capabilities in digital asset management and trading.”
Galaxy Digital is a leading player in the digital asset space, with over $1.2 billion in assets under management. The firm’s investment offerings include a diversified cryptocurrency index fund, a Bitcoin futures fund, and a cryptocurrency lending platform. The partnership with DWS will enable Galaxy Digital to expand its offerings to the European market and tap into institutional investors who may have been hesitant to invest directly in digital assets.
DWS, formerly Deutsche Asset Management, manages over €700 billion in assets and has a strong track record in developing innovative investment products. The firm has been actively exploring the potential of digital assets and blockchain technology, having recently launched a blockchain-specific fund for retail investors. The partnership with Galaxy Digital will enable DWS to expand its digital asset offerings and tap into the growing demand for crypto ETPs.
The partnership between DWS and Galaxy Digital comes at a time when the cryptocurrency market is experiencing rapid growth. Bitcoin, the largest cryptocurrency by market capitalization, has surged from under $10,000 at the start of the year to over $60,000 at its peak in April. Other cryptocurrencies, such as Ethereum and Binance Coin, have also seen significant growth in 2021.
The crypto market’s growth has been driven by a range of factors, including increased institutional adoption, the rise of decentralized finance (DeFi), and the growing acceptance of cryptocurrency by mainstream financial institutions. Major companies such as Tesla, PayPal, and Mastercard have all announced plans to support Bitcoin and other cryptocurrencies in various ways, signaling a growing acceptance of digital assets in the mainstream financial world.
The partnership between DWS and Galaxy Digital is the latest example of how traditional asset managers are attempting to tap into the growing cryptocurrency market. In the US, firms such as Grayscale and Bitwise have launched a range of crypto investment products, including Bitcoin and Ethereum trusts, which have attracted billions of dollars in investment.
In Europe, the market for crypto investment products has been slower to develop due to regulatory uncertainty and a lack of institutional interest. However, the partnership between DWS and Galaxy Digital could help unlock the potential of the European market and attract more institutional investment into digital assets.
The partnership is expected to launch its first range of crypto ETPs later this year, pending regulatory approval. The products will be listed on major European stock exchanges and will allow institutional investors to gain exposure to a range of digital assets in a regulated and secure environment. The partnership could also pave the way for similar collaborations between traditional asset managers and digital asset firms in other regions, as more investors seek to diversify their portfolios and gain exposure to the growing cryptocurrency market.
DWS, Germany’s largest retail fund provider, has partnered with US-based Galaxy Digital to launch a range of cryptocurrency-focused exchange-traded products (ETPs) for European investors. The alliance will further enhance Galaxy’s international distribution capabilities by providing European investors with access to the $1tn digital assets market through cost-effective investment solutions. DWS, with its €821bn listed fund house controlled by Deutsche Bank, will be the exclusive partner for Galaxy Digital’s crypto ETPs in Europe. The companies also plan to look into other digital asset solutions.
The partnership fulfills a key priority for DWS – to develop comprehensive digital solutions that unlock investor access to blockchain and digital assets. Steve Kurz, global head of asset management at Galaxy Digital, said his firm’s mission is to empower investors across the globe with simple and secure access to the digital asset ecosystem through institutional-grade products.
DWS and Galaxy Digital will jointly profit from emerging digital asset opportunities, and the partnership will significantly enhance Galaxy’s international distribution capabilities by deepening access to European investors who want to participate in the digital assets market. Fiona Bassett, global head of systematic investment solutions at DWS, said that their shared education-first approach and commitment to providing clients with access through trusted investment vehicles will enable them to build thoughtfully constructed and thoroughly researched products.
The partnership is part of a digital transformation that DWS has been experiencing over recent years. Stefan Hoops replaced Asoka Wöhrmann at the helm of the firm in June last year and announced in August the establishment of a team aligned with digital assets, currencies, digital channels, and application programming interfaces.
The DWS and Galaxy Digital partnership has resulted in a “comprehensive range of cryptocurrency-focused ETPs” for European investors. These ETPs will offer European investors a simple and cost-effective means to gain access to the digital assets market.
In conclusion, the partnership between DWS and Galaxy Digital is an important development for European investors who want to invest in digital assets. By creating a comprehensive range of crypto ETPs, DWS and Galaxy Digital are making it easier for investors to gain access to the growing blockchain and digital assets universe. With the increasing interest in digital assets and the need for secure access, this partnership is sure to pave the way for many more such collaborations in the future.
