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The global network of index trackers now extends to crypto etfs
Artwork by Gerd Altmann, Freiburg/Deutschland

Crypto ETF Listings

Published on 11 August 2021
Allan Lane
Allan Lane
Algo-Chain, Co-Founder

Well at long last, it looks like the Crypto ETF dam has been breached in the US. No hard facts on the table yet, but the rumour mills do appear to be in full swing suggesting that the SEC is finally onboard with the idea that it is better to embrace it than to fight it from the trenches.

In the meantime, elsewhere outside of the US, there has been a frenzy of activity of listings ETF listings covering a wide range of crypto products from several issuers, XBT from Stockholm, 21 Shares from Switzerland and Wisdom Tree from the US are among those firms with a first mover advantage.

Of course, let’s not forget Bitwise from San Francisco who pioneered the way forward in the indexing space in 2017. It’s quite amazing to think how much has changed since those pioneering days, and yet the party has hardly started.

Without trying to put these initiatives in the shade too much, I can’t help but wonder what the landscape will look like for investors when the world is awash with Central Banks Digital Currencies as they move from the pilot stage to an established component of the World’s central banking system.

In the meantime, for those of us who build Model Portfolios for a living, you could say the addition of a range of new asset/sub-asset classes has spiced up the challenge somewhat. While Bitcoin and Ethereum may not be that tame from a risk/return perspective, once embedded in a multi-asset core/satellite portfolio, those risks are much easier to manage. To that we can add the fact that to some extent these new crypto assets help diversify the portfolio and it’s not everyday that one has an opportunity to add previously unavailable exposures to one’s investment plans.

If delivering personalized portfolios is the challenge that many Wealth Managers are facing, then I guess that challenge will a little bit harder as we all grapple with the unknown unknown risks that comes with cryptos.

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