Beyond bitcoin and ether

Crypto for Advisors: Beyond bitcoin and ether

Happy Thursday, advisors!

In today’s newsletter, Glenn Williams Jr, from ProShares,explains why investors are looking beyond bitcoin and ether to manage concentration risk using multi-asset indices.

Then, in “Ask an Expert,” we examine key institutional trends and the growing preference for spot ETFs.

Happy reading.

Why crypto investors may look beyond bitcoin and ether

The cryptocurrency market is growing rapidly, with new technologies and networks emerging throughout the ecosystem every day. While bitcoin and ether remain the most widely known crypto assets, they represent just two among thousands of other cryptocurrencies. As of the time of writing TradingView puts the total crypto market cap at roughly $2.5 trillion, spanning a wide range of uses and applications across the crypto ecosystem. For investors seeking exposure to this evolving asset class, focusing on one or a few cryptocurrencies can mean missing opportunities across the broader market.

That distinction has become increasingly important as the crypto market matures. Bitcoin has largely established itself as the market’s primary store-of-value asset, while ether remains closely associated with smart contracts and decentralized applications. Beyond those two assets, however, networks have emerged targeting everything from faster transaction settlement and decentralized finance to interoperability, data infrastructure and other applications. Put differently, the crypto market is increasingly becoming a collection of different technologies and use cases rather than simply a collection of alternatives to bitcoin.

Those differences also mean that market leadership can change over time. As we have seen during previous crypto cycles, periods dominated by bitcoin performance can eventually give way to broader participation across the asset class. That does not necessarily mean that smaller cryptocurrencies will outperform bitcoin or ether. It does, however, mean that a portfolio concentrated in the two largest assets may have limited exposure if investor interest broadens elsewhere.

How a multi-asset index addresses concentration in crypto

The CoinDesk 20 Index was designed to provide diversified exposure to the crypto asset class through a rules-based index of 20 of the largest and most liquid cryptocurrencies. The index excludes memecoins, stablecoins and certain other crypto assets and it reconstitutes quarterly to capture changes in the market.

– Kim Klemballa, CoinDesk Data & Indices

Keep Reading

• The CLARITY Act fails to advance in the Senate, falling short of the 60 votes needed to move forward.
• Canada’s bank regulator Office of the Superintendent of Financial Institutions (OSFI) declares that tokenized deposits follow the same rules as traditional deposits.
• The UK House of Lords passes an amendment requiring the Treasury to publish a national digital asset strategy within 12 months covering crypto, stablecoins and tokenized securities.

Looking for more? Receive the latest crypto news from coindesk.com and market updates from coindesk.com/institutions.

This information is not meant to be investment advice. Any forward-looking statements herein are based on expectations of ProShare Advisors LLC at this time. Whether or not actual results and developments will conform to ProShare Advisors LLC’s expectations and predictions, however, is subject to a number of risks and uncertainties, including general economic, market and business conditions; changes in laws or regulations or other actions made by governmental authorities or regulatory bodies; and other world economic and political developments. ProShare Advisors LLC undertakes no duty to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Investing involves risk, including the possible loss of principal.
Crypto for Advisors

1. 1UK signals end of ‘light-touch’ era with multi-agency raid on peer-to-peer crypto hubs4 min ago
2. 2U.S. SEC begins prepping for around-the-clock trading that crypto treats as the norm9 min ago
3. 3Clarity Act failure may hamper U.S. crypto as industry seeks legal clarity elsewhere21 min ago
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Source: cryptonews.net