Global X Plots Expansion of Crypto Products, Research
A new head of digital asset products at Global X seeks to bring his traditional finance and crypto ETP background to build out educational resources and add to the company’s thematic product lineup.
The New York-based fund group brought aboard Adam Sze last month from Swiss ETP (exchange-traded product) issuer 21Shares. Before that, he worked for more than a decade at New York Life Investments, including as the firm’s director of product development.
Sze began learning more about crypto in late 2017, and though New York Life considered launching products within the space, he said, the company ultimately decided against it.
The executive jumped ship to 21Shares in August 2021 and spent the latter half of his 10-month tenure there as director of ETPs (exchange traded products). Sze led the design, implementation and launch of more than a dozen physically-backed crypto ETPs for the company, which manages more than $2 billion in assets.
“At 21Shares, I was able to combine my professional pursuits and my personal interests into a single role…I learned a lot about structuring digital asset products and also got a deeper education in the space,” he told Blockworks. “Now that I’m at Global X, I have the opportunity to get even more involved in the strategic planning and implementation for the firm’s digital asset initiative.”
Global X has 93 ETFs trading in the US with combined assets of roughly $40 billion, according to ETF.com. Its Global X Blockchain ETF (BKCH), which tracks a market cap-weighted index of companies in the blockchain space, launched last July and has about $60 million in assets.
The firm brought to market its Blockchain and Bitcoin Strategy ETF (BITS), which blends investments in crypto stocks and bitcoin futures contracts, last November. That actively managed fund manages about $10 million.
“While it’s nice to have single-asset ETPs…I think where we’re truly going to make an impact and make a win is bringing out innovative solutions that address specific client needs, whether that’s yield or volatility management,” Sze said.
In addition to addressing such needs, the company seeks to offer exposure to certain sectors of the digital asset space through index-based products, though Sze declined to share specific segments the firm could target.
Bitwise Asset Management Chief Investment Officer Matt Hougan noted during a panel at last month’s Permissionless event that he expects the share of indexing in the crypto space to rise from below 1% to 20% or 30% in the next 10 years.
Despite a focus on index-based products, Global X is mulling whether to re-apply for its proposed spot bitcoin ETF, Sze said, which the SEC rejected earlier this year.
Sze added that education is paramount for increasing adoption of digital asset investment products. While Global X seeks to bolster its thought leadership to help financial advisors educate their clients on the space, the firm also intends to make its research available to retail investors.
The ongoing downturn in crypto markets won’t impact how Global X thinks about new crypto products, Sze said. Still, he explained, the drawdown, coupled with macro headwinds such as elevated inflation, rising interest rates and supply chain issues could affect the adoption timeline of such offerings.
“I think in the near-term, there’s likely going to be muted interest in not only digital assets but risk assets as a whole as investors flock to safety,” he said. “But longer term, I think digital assets remain very compelling.”