ProShares Seeks Green Light for Multi-Coin Crypto ETF

ProShares aims to get approval for a multi-coin Crypto ETF as it plans to increase its exposure in the digital asset market

ContentsETF tracing top cryptocurrenciesDerivatives indirect exposureIncreasing crypto investment choicesThe company had submitted a request to the U.S. Securities and Exchange Commission (SEC) to launch the ProShares CoinDesk Crypto 20 ETF, which is a fund that tracks the CoinDesk 20 Index. This index gauges the performance of the 20 most liquid and capitalized cryptocurrencies.

ETF tracing top cryptocurrencies

As stated in the filing, the suggested ETF will track the CoinDesk 20 Index, excluding fees and other costs. The index comprises significant cryptocurrencies such as Bitcoin, Ethereum, Solana, and XRP. It, however, will not focus on meme coins, stablecoins, and wrapped tokens, but will instead examine assets that have significant market activity and high capitalization. The presence of established coins such as BTC, ETH, and SOL can be indicative of the fund being liquidity-focused and institutionally grade.

Derivatives indirect exposure

ProShares has verified that the ETF will not directly own any digital assets. Instead, it will seek to establish a market presence through derivatives, swaps, and other financial contracts tied to the index. To ensure that these contracts do not exceed 25% of the total assets of the fund, the company will establish a subsidiary in the Cayman Islands to manage them. The given structure does not conflict with existing regulatory provisions and enables investors to benefit from crypto market performance through a regulated investment vehicle.

The firm’s strategy is to pursue an upward trend in the industry. Crotty ETFs together with other asset managers (such as VanEck and 21Shares) have also applied to the SEC to have crypto-related ETFs approved. VanEck has also just revised its Solana ETF filing by reducing management fees, and 21Shares revised its spot Dogecoin ETF S-1 filing. Such trends indicate increased competition in the crypto ETF sector, with companies vying to launch diversified and compliant funds.

Increasing crypto investment choices

ProShares has already been involved in the digital asset industry as the pioneer ETF to track Bitcoin futures in the U.S. was introduced in 2021. The new proposal from the firm outlines its plan to meet the institutional need for multi-crypto investment products. The CoinDesk 20 Index, updated quarterly, comprises the following leading assets: Bitcoin, Ethereum, XRP, Solana, Cardano, and Avalanche. By diversifying in this manner, it will limit the risks associated with a single asset and provide broader exposure to the crypto market.

Should it pass the prior screening, the ProShares CoinDesk Crypto 20 ETF will be among the first diversified crypto ETFs on the U.S. stock market. The action supports ProShares’ expansion initiative in providing crypto-related products and will satisfy the increased demand of investors to access digital assets in a regulated, safe, and convenient manner. The proposal also indicates a broader shift in the financial sector, as fund providers seek to incorporate cryptocurrency exposure into more traditional investment models.