Blockchain firm HashCash Consultants is launching an inverse exchange-traded fund (ETF) that allows crypto traders to hedge the coronavirus’ downside risks and also gain returns by shorting the market.
Dubbed ‘Corona Fund Index Cryptocurrency (CFIX),’ the inverse fund is essentially an index ETF that gains value when its correlating index (the S&P 500) loses value. It achieves this by holding various assets and derivatives to gain inverse exposure and create profits when the underlying index falls.
The Corona fund coincides with the launch of HashCash’s new cryptocurrency, also named CFIX, which is scheduled for April 2 release. In essence, the crypto investment vehicle, which HashCash says will be listed on a major exchange without naming any venues, promotes the new coin that will be paired with stablecoin USDT (Tether).
With heightened volatility in markets, the company picked the S&P 500 market index for its secular and highly volatile trend, which is essential for short-term trading tools like inverse ETFs. This should provide investors a tactical window to capitalize on benchmark movements by trading on market news and noise and profit from volatility.
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HashCash creates Coronavirus relief fund
Adding a human touch to the passive offering, HashCash says it will donate 90 percent of its CFIX trade earnings to its Corona Relief Fund. The California-based blockchain consulting firm has created the fund to help support the hardest-hit workers as the coronavirus pandemic led to widespread layoffs across a range of industries, and many businesses have shuttered.
“The inception of CFIX was motivated by HashCash’s aim to provide financial aid to nonprofits and research organizations battling the COVID-19 crisis. The ETF backing incentivizes CFIX, which benefits not only the traders but enables us to raise more funds for all who are affected by Novel Coronavirus, which is the ultimate goal of this initiative,” said HashCash CEO Raj Chowdhury.
Cryptocurrencies and digital assets crashed last week, and look set for another volatile week ahead, as the implications of an escalating coronavirus outbreak spook investors across all markets. The downturn sparked anxiety and seemed just sudden for those betting on Bitcoin as a safe haven and also those riding high on continued price rallies.
HashCash, which raised $150 million in 2017, provides cryptocurrency exchange and payment processor white label solutions that comprise ICO services. It also operates US-based cryptocurrency exchange (PayBito) and crypto-focused payment processor, BillBitcoins.