New entry-level crypto index funds target Asian investors
Recent retail-friendly 'exchange-traded fund' launched by OKEx and Huobi reveal increased industry maturity and more gearing towards casual investors
With an array of new products encouraging greater mainstream investor interest in the crypto-currency market, a host of exchanges have launched their own crypto-currency index funds.
The latest is from Hong Kong-based OKEx and its OK06 Exchange-Traded Tracker, OK06ETT, aimed at traders seeking lower volatility and easy execution and who don’t want to spend time researching and planning. The exchange-traded fund – or ETF – is aimed at investors who do not have the time and inclination to follow markets closely but who want to lower their risk.
The fund allows investors to have exposure to an index based on a basket of digital currencies including Bitcoin Cash, Bitcoin, EOS, Ethereum, Litecoin and OKEx’s own OKB token. The OK06 tracker trades the digital currencies against the Tether dollar-pegged USDT token and, says the company in an online release, the portfolio only includes cryptos that are “greatly respected by institutional or individual investors and very often regarded as benchmarks in the world of digital asset.”
OKEx was founded in 2014 and says it has “gained millions of dollars worth of investments from leading enterprises such as VenturesLab, co-founded by Tim Draper … and Longling Capital, founded by the Chairman of Meitu, to provide “hundreds of token and futures trading pairs to help traders to optimize their strategy.” OKEx says it is “one of the top digital asset exchanges by trading volume, serving millions of users in over 100 countries” and claims its daily Bitcoin trades are often worth more than US$1.5 billion.
The new Exchange-Traded Tracker allows entry-level investors to trade with a minimum commitment of US$100, which compares favorably to similar offerings from Coinbase and Grayscale Investments, with a threshold of US$250,000 and US$50,000 respectively, making the offering affordable and retail friendly.
The emergence of these index funds is a sign of maturity for the cryptocurrency space, which has been dogged by accusations of dodgy dealing and a lack of sustainability. Its image has not been helped by a string of high profile heists of digital assets from exchanges globally, along with a host of scam ICOs.
OKEx’s announcement comes following the news that Singapore-based cryptocurrency trading platform Huobi launched its own crypto-based exchange-traded fund via its Huobi Pro platform. Known as HB10, it can be traded with Bitcoin, Ethereum, Tether (USDT) and the platform’s own Huobi Token (HT).
“Being first to market, HB10 offers interchangeability with other digital assets hosted by Huobi Pro. HB10 will help users attain exposure to the digital assets market with a relatively small capital outlay and also provide users with greater diversification across constituent coin trading pairs,” the company said in an online release.
Huobi added that: “Overall, the tracker product will help users who are interested in blockchain technology to trade the broad digital assets.”
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