Galaxy Links Up With $821B Asset Manager as Part of Europe ETP Push

Galaxy Digital looks to bring ETPs to European investors via its new partner in the continent — a fund group with nearly $1 trillion in assets under management.  

The alliance looks to enhance Galaxy’s international distribution capabilities and extend its reach to what it considers to be a fast-growing region from a crypto lens, a company spokesperson told Blockworks. 

“There has been continued demand amongst European investors for institutional-grade products that will enable them to access crypto markets in a cost-effective, simplified fashion using their brokerage accounts,” the representative added. “While these products are being quickly developed at scale in the US market, they have unfortunately lagged in European markets.”

Germany-based DWS — formerly a part of Deutsche Bank — had 821 billion euros (about $910 billion) in assets under management as of Dec. 31. Nearly half of those assets are sourced in Germany, while a quarter reside in the Americas. 

DWS currently offers a slate of traditional investment products across multi-asset, fixed income, alternatives and equities. Fiona Bassett, DWS’s global head of systematic investment solutions, said in a statement the company is seeing “increasing client interest in digital assets and the need for secure access.”

A Galaxy spokesperson declined to comment on specific ETPs it could seek to launch via the partnership. 

Galaxy’s link-up with DWS, revealed Wednesday, comes after the crypto-focused company partnered with fund giant Invesco in September 2021 to develop a suite of crypto ETFs in the US.

It launched the Invesco Alerian Galaxy Crypto Economy ETF (SATO) and the Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETF (BLKC) the following month. Those funds have less than $6 million in assets under management combined. 

In November, Galaxy formed an alliance with hedge fund firm Itaú Asset Management, — Latin America’s largest private asset manager — launching the IT Now Bloomberg Galaxy Bitcoin ETF (BITI11) on the B3 Stock Exchange.

While Brazil has been more progressive when it comes to allowing spot crypto products, such efforts in the US have been stifled.

Though Invesco became a sponsor of Galaxy’s proposed spot bitcoin ETF at the time of the 2021 partnership, the SEC did not approve that fund, or any similar proposed offerings by other issuers. 

Judges are expected to decide on the securities regulator’s lawsuit with Grayscale Investments — related to the SEC denying the conversion of the Grayscale Bitcoin Trust (GBTC) to an ETF — in the coming months. 

Meanwhile, Europe’s crypto regulatory environment looks more favorable, particularly after the EU Parliament passed the Markets in Crypto Assets (MiCA) regulation last week. The framework, which requires regional crypto asset services providers (CASPs) to gain licenses from national authorities, is expected to boost trust in the segment. 

While Galaxy looks to sharpen its focus on Europe, the company intends to continue partnering with Invesco in the US and Itaú Asset Management in Brazil, according to the spokesperson.  

“This strategic alliance will simply expand our geographic reach, enhance the suite products we are able to offer to investors, and deepen our partnerships with leading institutions across the globe,” the representative said.

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