Leading asset manager ProShares is seeking to establish a new crypto ETF tracking the CoinDesk 20 Index. Hence, it has registered with the Securities and Exchange Commission (SEC) in the United States to seek approval. It evaluates the performance of the 20 best-performing cryptocurrencies in terms of market capitalization.
ProShares ETF to Track CoinDesk 20 Index via Swaps and Derivatives
The suggested fund will be known as the ProShares CoinDesk Crypto 20 ETF. It will provide investors with a chance to invest in such major digital assets as Bitcoin, Ethereum, XRP, and Solana. The ETF aims to track the performance of the CoinDesk 20 Index before fees and other expenses, per the SEC filing.
The index does not include stablecoins, memecoins, or wrapped tokens. The fund will focus on cryptocurrencies that has good liquidity and massive market caps. The benchmark of the fund has a high exposure to Bitcoin, Ethereum, and XRP. Also, Solana ranks among the next largest assets in the index. Recently, VanEck amended its Solana ETF filing, even cutting fees to 0.3% as competition intensifies among crypto fund issuers.
ProShares stated that the ETF will not hold cryptocurrencies directly. Rather, it will gain exposure using swaps, derivatives and other similar financial instruments based on the constituents in the index. A similar trend is seen across the market. 21Shares recently amended its S-1 filing for a spot Dogecoin ETF seeking SEC approval
This will be an investment structure that meets regulatory standards. Also, it enables investors to have a path through which they can access the performance of the crypto market through a regulated vehicle.
The fund plans to have a Cayman Islands subsidiary in order to implement some derivative contracts. However, it will have a limit that would not exceed 25% of its assets.
ProShares Filing Follows Increasing Institutional Crypto Demand
Having launched its most popular product (a Bitcoin futures ETF) in 2021, the company keeps on adding more crypto-related investment products. The new filing indicates rising institutional interest in diversified crypto baskets to reduce the volatility of individual assets.
The CoinDesk 20 Index rebalances quarterly. Currently, it includes some of the most actively traded coins, such as Bitcoin, Ethereum, XRP, Solana, Cardano, and Avalanche. This follows a broader trend, as REX–Osprey recently filed for many ETFs tied to altcoins like ADA, HYPE, XLM, and SUI.
If it is given the green light, the ProShares CoinDesk Crypto 20 ETF would be one of the first diversified crypto ETFs in the United States. It would enable traditional investors to have exposure to a variety of digital assets in one fund. This would possibly speed up the institutional adoption of crypto as more of such products would be included in their portfolios.
