KraneShares, a leading investment firm, has applied for a new exchange-traded fund (ETF) aimed at the top 50 cryptocurrencies by market capitalization. This move comes amid increasing interest from institutional investors in crypto assets.
New ETF by KraneShares
The proposed ETF, named "KraneShares Coinbase 50 Index ETF," is designed to track the performance of the largest 50 cryptocurrencies. The product will be based on the Coinbase 50 Index, which selects the top 50 cryptocurrencies by total market capitalization.
Diversification and Risk Strategy
With the new ETF, investors can diversify their portfolios and comprehensively assess the cryptocurrency market. The strategy provides an opportunity to mitigate risks by distributing investments across various assets, with the weighting of altcoins in the basket depending on their market capitalization.
Regulatory Process and Approval Expectations
Approval from the SEC is essential for such ETF products to materialize. Once the application process is completed and approval is granted, KraneShares' ETF can be offered to investors. Given the long evaluation processes for previous applications, the success of this application may rely on upcoming altcoin ETF approvals expected in November.
KraneShares' ETF application allows institutional investors to earn returns on altcoins with reduced risks. It may also attract capital to lesser-known altcoins. If approved, this will pave the way for similar products in the future.
