Exchange-traded fund (ETF) specialist manager BetaShares will be launching an offering providing investors with an avenue to invest in companies critical to servicing the cryptocurrency market.
The BetaShares Crypto Innovators ETF will trade on the Australian Securities Exchange (ASX) under the CRYP ticker and will be focused on holdings in organisations involved in the technology underlying crypto assets.
“The crypto economy is highly dynamic and growing rapidly, and is built using exciting and disruptive technology. CRYP will be an innovative way for investors to get exposure to the crypto sector in a familiar, liquid and cost-effective ETF structure,” BetaShares chief executive Alex Vynokur said.
“Mark Twain is famous for saying that ‘during the gold rush it’s a good time to be in the pick and shovel business’. CRYP will take a ‘pick and shovel’ approach to the crypto sector, investing in the companies that are driving the crypto economy.”
The fund will track the Bitwise Crypto Industry Innovators Index before fees and expenses to provide the underlying assets of the new product.
To this end, the ETF will invest in what are considered pure-play crypto companies with balance sheets substantially comprising crypto assets and diversified companies with crypto-focused business lines.
More specifically, 85 per cent of the index is currently made up of organisations that derive at least 75 per cent of their revenue from directly servicing crypto markets, or have at least 75 per cent of their net assets in direct holdings of crypto assets. Indicative activities of such companies include crypto mining and mining equipment, and providing crypto trading venues.
The remaining 15 per cent of the underlying index is allocated to diversified large-cap companies with at least one significant business line focused on the crypto economy.
Cryptocurrency exchange platform Coinbase, Bitcoin mining company Riot Blockchain and business intelligence firm Microstrategy are all presently included in the index.
According to the manager, the ETF is expecting to attract inflows from individuals interested in an allocation to the crypto sector, but who do not actually want to physically trade currencies, and people who are looking for improved diversification to the crypto component of their portfolios.
The new ETF is expected to commence trading on the ASX in the coming weeks.