Things remain interesting in the world of digital currency, and that has implications for crypto exchange-traded funds.
Bitcoin’s direct exposure with ETFs was an important milestone for the ETF industry. Some experts believe that the introduction of Bitcoin Exchange Traded Funds (ETFs) could be just as important as the introduction of gold-backed ETFs.
Bottom line: There has been some change in the crypto ETF arena, which is good news for investors. With that in mind, let’s look at some opportunities for market participants, including some Bitcoin funds.
ProShares Bitcoin Strategy ETF ( BITO)
The ProShares Bitcoin Strategy ETF (BITO) tracks the price of bitcoin, but it’s futures-based because regulators are delaying approval of a physically-backed Bitcoin exchange-traded fund. It’s anyone’s guess when an actual Bitcoin ETF will be approved by the SEC.
BITO, which debuted just a few months ago, has already attracted more than $1 billion in assets. On November 11, BITO had $1.58 billion of assets under management, making it one of the best-performing new ETFs to come out this year.
BITO was followed up by the Valkryie Bitcoin Strategy ETF (BTF). That actively managed ETF invests in both bitcoin futures and bitcoin itself.
Global X Blockchain ETF ( BKCH)
The Global X Bitcoin ETF (BKCH), which is one of an array of crypto ETFs, doesn’t actually provide direct exposure or investment in bitcoin or any other digital assets. Instead, BKCH and other funds in this still developing fund category are built on a foundation of equities, which are often proven to have positive correlations to cryptocurrencies.
BKCH includes crypto miners, companies involved in blockchain and cryptocurrency transactions, purveyors and manufacturers of blockchain technology, including hardware and software, and more. While BKCH is not a pure crypto ETF, investors should sleep on its potential as digital assets increase in relevancy.
Hashdex Launches First Crypto ETF
Brazilian asset manager Hashdex has launched the first crypto ETF, the HODL Index Fund. The fund, which allows non-U.S.-based investors to invest in cryptocurrencies, offers a simple solution to institutions looking to gain exposure to the crypto market.
Developed by NasDAQ and Hashdex, this ETF tracks the NASDAQ Cryptocurrency Index (NDX). The index, which was developed by Nasdaq’s calculation agency, CF Benchmarks, is designed to represent an investable landscape of the crypto market through strict eligibility criteria, including the following:
“We are pleased to announce our partnership with Nasdaq, Nasdaq’s calculation agent CF Benchmarks and BSX to launch the world’s first cryptocurrency exchange-traded fund (ETF). This is an amazing achievement that shows the maturity and respect for cryptocurrencies among institutional investors. Cryptocurrencies have gained tremendous momentum in the past months.
As interest grows among investors, Hashdex looks to BSX for guidance on Bermuda’s new regulations on the digital asset market. On September 20, 2020, BSX announced its listing approval, welcoming a whole new era in the global crypto market.
The HASHDEX Nasdaq Crypto ETF offers investors a balanced portfolio of cryptocurrencies, bringing index investing to an emerging market that has seen explosive growth in recent years.
The fund seeks to track the NASDAQ Crypto Index (NCI) which represents the institutional investment market for cryptocurrencies. Investors only own the strongest assets because they meet certain inclusion criteria, such as market representation, liquidity thresholds, presence on regulated exchange platforms, and institutional custody support. The NCI and its related ETFs rebalance quarterly.
