ProShares has been actively working on developing more crypto-related investment options.
A leading asset management firm, ProShares, has announced its intention to introduce a new crypto ETF that will track the CoinDesk 20 Index.
To achieve this, the company seeks approval from the Securities and Exchange Commission (SEC) after submitting a filing to the commission.
Meanwhile, reliable sources have noted that this index is crucial in the cryptocurrency ecosystem, as it measures the performance of the top 20 cryptocurrencies based on their market capitalization.
Crypto fund providers embrace crypto ETF approval in the sector
ProShares shared the new fund’s name, suggesting it will be known as ProShares CoinDesk Crypto 20 ETF. According to the company, it will enable investors to invest in key cryptocurrencies, including Solana, Ethereum, XRP, and Bitcoin.
On the other hand, the SEC filing highlighted that this ETF is designed to reflect the performance of the CoinDesk 20 Index. Notably, this will not account for fees and other expenses.
Reliable sources have also conducted research and discovered that the index will not comprise wrapped tokens, meme coins, or stablecoins, but will instead focus on cryptocurrencies with significant market capitalizations and strong liquidity.
To support this claim, the market benchmark prominently includes BTC, ETH, and XRP, with SOL also being one of the largest assets in the index.
Meanwhile, it is worth noting that ProShares’ move illustrates a growing trend among crypto fund providers seeking approval for crypto ETFs. An example is VanEck, which recently updated its Solana ETF application and reduced fees to 0.3%.
Regarding ProShares’ crypto ETF, the company has made it clear that its ETF will not directly own any cryptocurrencies. Instead, it aims to gain exposure in the cryptocurrency ecosystem by using swaps, derivatives, and similar financial tools linked to the assets in the index.
Sources have confirmed that this approach is highly preferred in the market, citing examples like the recent update of 21Shares’s S-1 filing for a spot Dogecoin ETF seeking approval from the SEC.
They also highlighted that this investment setup will comply with the current regulatory standards. Additionally, it will enable investors to acquire the performance of the crypto market via a regulated option.
The fund intends to set up a subsidiary in the Cayman Islands to manage certain derivative contracts. However, it will ensure that these contracts do not surpass 25% of its total assets.
ProShares seeks more crypto-related investment options
In 2021, ProShares introduced a Bitcoin futures ETF, marking the first US bitcoin-linked ETF. Since its launch, the company has been actively working on developing more crypto-related investment options.
ProShares increased its interest in this sector after the latest filing highlighted that several institutions preferred diversified crypto baskets to help them mitigate the uncertainties surrounding individual assets.
Regarding the CoinDesk 20 Index’s updated process, it undergoes an update every three months. Moreover, it includes some of the most popularly traded coins, such as BTC, ETH, XRP, SOL, ADA, and Avalanche.
This aligns with a broader trend, as REX-Osprey has recently submitted filings for several ETFs linked to altcoins, including ADA, HYPE, XLM, and SUI.
If approved, the ProShares CoinDesk Crypto 20 ETF will be positioned as one of the first US diversified crypto ETFs.
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