- Evolve ETFs has introduced the first multi-cryptocurrency exchange-traded fund (ETF), which incorporates both bitcoin and ether.
- Currently, bitcoin makes up 68 percent of the Evolve Cryptocurrencies ETF’s holdings, while ether makes up 32 percent.
Investors looking for cryptocurrency diversification may now invest in a cryptocurrency ETF that owns both bitcoin and ether. This ETF is traded on the Toronto Stock Exchange.
What Is An ETF?
An exchange traded fund (ETF) is a form of securities that tracks an index, sector, commodity, or other asset and may be bought and sold on a stock exchange much like a regular stock.
About The Evolve ETF
The Evolve Cryptocurrencies ETF is a market capitalization-weighted crypto fund that owns bitcoin and ether. Currently, bitcoin makes up 68 percent of the fund’s holdings, while ether makes up 32 percent.
Bitcoin and ether account for roughly 65% of the total cryptocurrency market.
Evolve’s fund provides advisers with a safer approach to experiment with bitcoin by balancing the two currencies. According to Bloomberg, Ether will outperform Bitcoin by over 150 percent in 2020, according to Evolve’s CEO. However, in 2019, Ether had a negative return, whilst Bitcoin had a 90% return.
“Even though these two cryptocurrencies are somewhat correlated to each other, they’ve had different return profiles,” said the CEO. “So, by putting them into one ETF and accessing both at the same moment, you’re taking out some of the guesswork. That’s the whole purpose of having a more diversified fund: to dampen some of that volatility and hopefully capitalize on the cryptocurrency that’s significantly outperforming the other.”
The new ETF will be rebalanced periodically and will not pay distributions because it does not use leverage.
“EBIT and ETHR provide investors with exposure to the daily price movements of the US dollar price of Bitcoin and Ether, respectively, by utilizing the benefits of the creation and redemption processes offered by the exchange traded fund structure,” Evolve quoted
By holding the Evolve Bitcoin ETF (EBIT) and the Evolve Ether ETF, it will acquire exposure to bitcoin and ether (ETHR). The underlying ETFs in the fund have a 0.75 percent management cost, hence there is no management fee.
The underlying plumbing of ETFs is the formation and redemption process, which allows them to be more transparent, less expensive, more tax efficient than mutual funds.
The Evolve Cryptocurrencies ETF has only $2.1 million in assets after its first day of trading. According to the firm’s website, Evolve ETF’s two other cryptocurrency ETFs have around $181 million in assets under management.
Evolve has been intending to launch a multi-crypto ETF for a while, but the Ontario Securities Commission has only approved Bitcoin and Ether. Raj Lala, the CEO, expects it to approve more in the future, allowing Evolve to extend the fund’s offerings.
About Evolve Funds Group Inc.
Since releasing its debut ETF in September 2017, Evolve has grown to be one of Canada’s fastest growing ETF providers. It has about $2 billion in assets under management. Evolve is a pioneer in the field of thematic exchange-traded funds (ETFs). It specialises in introducing disruptive innovation ETFs to Canadian investors. Investors can invest in Evolve’s ETFs to have access to:
(i) long term investment themes
(ii) index-based income strategies
(iii) some of the world’s leading investment managers
While the crypto ETF market in Canada is gaining traction, Investors in the world market still have limited choices for obtaining exposure to cryptocurrencies other than buying them outright due to strict regulations in several countries.