ETFs: The Bridge Between Cryptocurrencies & Institutional Investment

An ETF (Exchange-Traded Fund) is a marketable security that tracks a group of assets like an index fund. An example of an EFT is the FTSE 100. These are different assets, bunched together into one package for the purpose of being traded on.

Why are ETFs a big deal for cryptocurrency?

To put things into perspective, Jeff Bezoz, Founder of Amazon.com, has a net worth of $130 billion; a third of the whole cryptocurrency market.

Top developers are moving from Google and Youtube (the founder of Youtube is behind $Theta) into the cryptocurrency markets, which will inevitably bring in the institutional attention as well. There is money that wants to pour in (trillion of dollars) that is held due to the lack of regulation and uncertainty, regarding tax and legality.

What EFTs allow is a channel for institutions to invest in a traditional sense, into a pre-packaged collection of approved cryptocurrencies which can be traded on, without the red tape of ambiguity, providing the security they require.

This could potentially allow for money from the financial institutions to pour into the cryptocurrency markets; not just any assets, but the ones contained within the HB10 (and others which will soon follow).

Institutional Investors

So Why Huobi Token (HT)?

Huobi launched its first Huobi 10, ‘HB10’ benchmark index. Apparently, this ETF lead to 10 million investors subscribing within the first 30 minutes of their launch on the 1st June 2018.

“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. Overall, the tracker product will help users who are interested in blockchain technology to trade the broad digital assets market.” Huobi

Contained within the 10 coins being packaged into the HB10 (with rebalancing of their index every quarter), Huobi Token is one of the main constituents (accounting for 25.6% of the ETF).

This is why we are giving HB a strong buy rating for the medium & long term hold.

So what type of coins will be packaged into these ETFs?

As of the 28th of May 2018, the index includes BTC (26%), HT (25.6%), EOS (17%), ETH (11.3%), BCH (5.1%), XRP (4.2%), LTC (3.2%), IOST (3%), ETC (2.5%), and DASH (1.7%)

cryptocurrency etfs

What is the next step that can bridge the gap between cryptocurrencies and the institutional investors?

It’s already taken place; Fusion Financial Advisors, LLC is the first federally registered cryptocurrency investment advisor in the United States. Founded by ETHOS.

Their services will be offered on Ethos.io platform and will be investing in the ETFs mentioned above, as well as other singular digital assets (cryptocurrencies).

Want our top 20 recommendations that have qualified our extensive fundamental and technical analysis for June & July 2018? Click here.

Leave a comment

Subscribe Now

Sign Up For Exclusive Market Updates