What is an ETF? It stands for Exchange Traded Fund? First of all, what is a fund? Fund is a diversified portfolio of assets. Exchange Traded Fund putting it in simple terms, is a portfolio that can be traded in traditional “fiat” exchanges, such as London Stock Exchange or New York Stock Exchange. And there is the problem for crypto ETFs. When traditional markets are going up, your ETF goes up as well, and respectively during bearish markets, ETFs drop. This concept called market beta.
However, we all may agree on the following point: crypto assets have nothing to do with traditional equity market. When you invest in buying some crypto coins, you are having exposure on digital market. However, what happens when someone put digital assets to traditional fiat exchange as an ETF? His ETF would inevitably follow the market pattern price whether it is a bull run or a bearish one. This is the major problem with crypto ETFs.
Is there a solution?
The solution is quite simple. Crypto investable indices! They are pure digital assets without any relevance or exposure to traditional market beta. They are diversified portfolios, increasing return while decreasing risk in a major level, tradeable instrument, meaning that can be bought or sold any time.
As you know at MPCX, we have built 3 Crypto Investable Indices for our innovative investors. They are:
• Crypto Large Cap Index (CLT): holds the top 10 coins by market capitalization
• Mid Cap Index (M20T): includes the next top 20 coins by market capitalization
• Smart Beta Exposure Crypto Index (SBCI): triggered by an AI algorithm
These products are structured solely with digital assets without any influence by traditional market beta, in order for our clients to experience a smooth and safe trading experience.