Canary Capital Proposes New ETF Combining Cryptocurrency and NFTs
American investment firm Canary Capital has launched a new exchange-traded fund (ETF) proposal with the Securities and Exchange Commission (SEC), which will combine cryptocurrencies and NFTs into a single investment product. The proposed fund, the Canadian Pengu ETF, will include the $PENGU token—on the Solana blockchain—as well as the Ethereum-based digital asset collection of the Chubby Penguins NFT series, marking the first known attempt to include NFTs in a regulated ETF in the United States. The SEC application was submitted on Thursday, but no timeline for review or approval has been provided.
Source: Luca Netz
What is an ETF?
An exchange-traded fund (ETF) is a financial product that tracks the performance of a specific asset or a group of assets. ETFs are traded on stock exchanges and can be bought and sold like individual stocks. They are typically used to give investors access to specific sectors, commodities, or indices without requiring them to directly purchase or manage the underlying assets. In the context of cryptocurrency, ETFs can provide exposure to digital tokens without investors having to handle wallets, direct exchanges, or custody.
Source: Igloo Inc.
Why Does This Matter?
If approved, this would be the first ETF in the United States to include NFTs as part of its portfolio. Previous digital asset ETFs—such as those tracking Bitcoin or Ethereum—only included fungible tokens. NFTs possess unique characteristics and variable pricing that are inherently different from cryptocurrencies. Including them in a regulated investment fund presents new challenges, including how to value, store, and audit such assets. The SEC has yet to release specific guidelines for NFT-based ETFs. Other firms, including Vaneck and Bitwise, have also submitted proposals related to Solana, Litecoin, and XRP.
