Singapore-headquartered cryptocurrency exchange Huobi has recently announced the launch of a cryptocurrency-based exchange traded fund (ETF). Similar to traditional funds, investors can buy stakes of the fund, which itself consists of an investment portfolio of multiple cryptocurrencies.
The fund, called HB10, is based on the firm’s recently launched benchmark index, Huobi 10.
Huobi has allowed retail investment in the fund and to lure a wide range of investors, the exchange is allowing them to subscribe to it with Bitcoin, Ether, USDT, and its native Huobi token. The strategy of the exchange has been working very well as it is claiming that 1o million investors subscribed within 30 minutes of the fund’s launch last Friday.
Just launched and have more than ten million subscription in just 30 mins!
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— Huobi Pro (@Huobi_Pro) June 1, 2018
Huobi is calculating the index using Pasche weighted composite price index formula and it includes most of the major cryptocurrencies listed in the market including HT at 29.3 percent, BTC at 23.1 percent, EOS at 17.3 percent, ETH at 10.9 percent, BCH at 5.2 percent, XRP at 4.1 percent, IOST at 3.1 percent, LTC at 3 percent, ETC at 2.3 percent, and DASH at 1.5 percent.
The exchange, in its announcement, highlighted interchangeability nature of the index noting: “Being first to market, HB10 offers interchangeability with other digital assets hosted by Huobi Pro. HB10 will help users attain exposure to the digital assets market with a relatively small capital outlay and also provide users with greater diversification across constituent coin trading pairs. Overall, the tracker product will help users who are interested in blockchain technology to trade the broad digital assets market.”
ETF or not?
Many fund managers, including Winklevoss brothers, had tried to launch crypto-backed ETFs in the US stock exchanges. The launch of Bitcoin futures in two exchanges last year also seemed to have paved the way for such funds. However, the strict regulations imposed by the Securities and Exchange Commision (SEC) did not allow the entrance of crypto ETFs in the Wall Street.
Though Huobi is marketing the fund as an ETF, many experts are questioning it as HB10 is not listed on any registered exchange similar to conventional ETFs.