Why SPDR® Galaxy Digital Asset ETFs?

Since the first block of bitcoin was mined in 2009, the digital asset ecosystem has grown across industries, markets, and use cases—revolutionizing how we move money and manage assets.

With any major growth trend, it’s tough to pinpoint exactly what stage we’re in with digital assets—but when it comes to their integration into global finance, it’s likely we’re in the early innings and we could still be far from the ninth.

With an estimated 659 million crypto users worldwide,¹  the world’s digital assets market is expected to reach $100 billion of revenue in 2025.²  Institutional interest in digital assets is growing—in 2025, 67% of institutions think they will increase their allocation to cryptocurrencies, digital assets, and crypto related funds.³ And use cases for digital assets are growing, too. Tokenization, stablecoins, and decentralized finance could revolutionize how value is created, transferred, and stored across the world economy.

Both institutional and retail investors see the potential for long-term growth in an area that is largely unrepresented in traditional portfolios. Among institutional investors, 94% believe in the long-term value of blockchain technology and/or digital assets,⁴ and 64% of retail investors have invested in digital assets or related products (Figure 1).⁵  And 60% of institutional investors prefer to gain exposure to crypto through registered vehicles like exchange traded products.⁶

Figure 1: Investors are bullish on digital assets

Prior to 2009, a digital asset was thought of as anything created and stored digitally. At first, that ranged from family photos and videos to corporate records—objects that might be valuable only to the creator or organization.

Now with blockchain technology, users can create, store, and transact a wide variety of assets or data across a decentralized, secure, and transparent network, revolutionizing the way we think about digital ownership. The first blockchain and cryptocurrency, bitcoin, was launched in 2009, redefining digital assets and creating a new ecosystem that now spans cryptocurrencies, non-fungible tokens (NFTs), stablecoins, financial applications, gaming, tokenized assets, and much more.

Bitcoin was initially created as a peer-to-peer payment system. But the use cases for digital assets and blockchain technology have rapidly expanded. Digital assets and blockchain technology have the potential to modernize the financial system by improving efficiency in global money movement, automating complex transactions, and democratizing access to private markets. With the potential to secure almost anything by blockchain technology, the digital asset ecosystem is now valued at $3.9 trillion.¹⁰

Why invest in digital assets now?

There is a strong network effect for digital asset adoption. Ownership in digital assets is growing at a similar pace to internet users in the late 1990s. With the SEC’s approval of crypto ETFs and other favorable regulatory guidelines toward digital assets likely coming, investors are beginning to think of digital asset exposure as a core long-term growth holding. As adoption of blockchain technology continues to expand through new use cases across multiple industries, blockchain-related companies may benefit from new growth opportunities. Other revolutionary technologies, such as artificial intelligence (AI), may even help accelerate blockchain adoption by leveraging synergistic value chains and potentially compounding the growth of the digital asset ecosystem.

There are also markets and regulatory catalysts on the horizon, and regulatory clarity remain key issues for investors globally.¹¹  Building off the momentum of the passage of GENIUS Act—the first US legislation on crypto assets to regulate USD-backed payment stablecoins—Congress is working on a more comprehensive digital asset market structure bill which will help provide guidance and a framework on how to regulate digital assets. This will provide a more clear path on how institutions can participate in this industry (in fact, 50% of institutions already say they use stablecoins for yield generation, foreign exchange, and other use cases).¹²  The result could further accelerate the adoption of blockchain and digital assets and bring new blockchain-related companies public.

The benefits of active management for digital assets

With the astounding pace of innovation in the digital assets industry, active managers dedicated to understanding the nuances of the digital assets ecosystem can help position portfolios to capture its rapid adoption and long-term growth potential by focusing on:

• Market volatility and inefficiencies: Digital assets and crypto-related stocks have historically been more volatile than traditional asset classes.¹³ The emerging nature and rapid evolution of the digital assets industry creates opportunities for active managers to take advantage of mispriced or undervalued companies
  
• Market maturity and adoption curve: Since the pace of adoption and market maturity varies across different blockchains and use cases, active managers may have a deeper understanding of the rewards and risks in various parts of the ecosystem, staying current and nimble in portfolio positions
  
• Technological complexity: Active managers with deep expertise in the digital asset ecosystem are well equipped to spot the companies best positioned to benefit from blockchain adoption and uncover distinctive investment opportunities for their clients
• Diverse ecosystem: The digital assets ecosystem offers a wide range of ways to gain exposure. The integration of digital assets and blockchain technology across industries and companies of all sizes gives active managers a wide universe of opportunities to build well-diversified portfolios with high growth potential

A powerhouse partnership with Galaxy Asset Management

State Street Investment Management’s partnership with Galaxy makes the digital ecosystem more accessible to the broader investment community through the creation of three ETFs that offer unique exposures to the growth of the digital asset boom.

Since 2018, Galaxy has delivered institutional-grade access to the digital assets ecosystem across three complementary operating businesses: Global Markets, Asset Management, and Digital Infrastructure Solutions. As one of the world’s largest digital assets and blockchain investment managers, Galaxy Asset Management can help generate alpha by applying traditional financial analysis and deep crypto know-how, and provide access to the growing digital economy through:

• Digital asset leadership: Galaxy has extensive global expertise in blockchain and digital assets with crypto-focused and native specialists uniquely equipped to navigate a rapidly evolving space. With nearly 500 employees, they share the same passion of promoting the responsible adoption of digital assets globally
  
• Risk management: Galaxy’s market discipline and resilience through every major crypto cycle over the past seven-plus years have been driven by robust risk management and governance practices.
• Network connections: Galaxy is exceptionally connected throughout the blockchain and digital assets ecosystem which provides them with unique insights into blockchain-related companies and businesses
  

Galaxy Asset Management by the numbers

Introducing SPDR® Galaxy ETFs

Consider these three SPDR ETFs that deliver well-researched, high-conviction exposure to the digital asset ecosystem:

How to implement SPDR Galaxy ETFs

Allocating to digital-asset related exposures depends on your risk tolerance and investment horizon. Since crypto-related companies are underrepresented in traditional core or growth portfolios, you can consider DECO and HECO to replace a portion of your growth allocation to complement the core while also seeking to enhance growth potential from non-traditional thematic sources.

And if you are already investing in crypto assets, consider using DECO and HECO to capture the broader benefits of the rapid adoption of blockchain technology and crypto assets over the long term.

TEKX’s focus on companies supporting new disruptive technologies across economic segments can complement existing Technology sector exposure. And given the long-term growth potential of transformative technologies, you also can consider replacing a portion of your growth allocation with TEKX to enhance and diversify growth allocations beyond traditional growth exposures.

Benefits of ETFs for investing in digital assets

The unique benefits of the ETF wrapper make the vehicle a sensible choice for investing in digital assets:

• Diversification: Investors gain exposure to a basket of companies that may benefit from the adoption of digital assets in a single security, making it easy to build diversified portfolios. Our 2024 ETF Impact Survey found individual investors report diversification as the top reason for using ETFs (49%).
• Access: ETFs are the great equalizer in terms of market access, and they’ve expanded access to investing in the digital asset universe. Now, individuals have the same access to underlying securities and pricing as institutional investors.
• Liquidity: High liquidity implies numerous buyers and sellers for an asset, making it easy to trade without significant price fluctuations. Because ETFs trade throughout the day on an exchange (known as the secondary market), they are considered liquid investments. And through their creation and redemption process, ETFs gain a liquidity boost from the primary market—where securities are created and initially sold. According to our 2024 ETF Impact Survey, 91% of institutional investors who identified as heavy ETF users report that liquidity is important to their institution’s investment strategy.
• Tactical asset allocation: Liquid ETFs allow investors to make quick adjustments to their long-term asset allocation to take advantage of short-term tactical opportunities, even in times of market stress.
• Flexible trading: ETFs also offer trading techniques like limit orders, stop-loss orders and buying on margin.
  

When you think about how the digital assets playing field is evolving day by day, quarter by quarter, year by year, it’s tough not to hear the soft whisper from Ray Kinsella’s cornfield. “If you build it, he will come." We’re not expecting Shoeless Joe Jackson, of course, but a full roster of players—companies and investors alike—committed to building and supporting the digital assets game as the rules continue to evolve.

Adding exposure to the digital assets theme may offer a way to step into the game early and access potential growth, with diversified exposure to the technologies and companies shaping the future of finance.