- ProShares plans a new ETF that will track the top 20 digital assets by market cap using the CoinDesk 20 Index.
- The ETF will not hold crypto directly but will use swaps and derivatives for market exposure.
- The fund excludes stablecoins and memecoins and focuses on large-cap assets like Bitcoin, Ethereum, and Solana.
ProShares, an asset manager, has filed with the U.S. Securities and Exchange Commission (SEC) a new cryptocurrency ETF. The proposed fund will be referred to as the ProShares CoinDesk Crypto 20 ETF, which will track the CoinDesk 20 Index. This index measures the performance of 20 leading digital assets by market capitalization.
The fund will not make direct investments in cryptocurrencies. Rather, it will gain exposure through the financial instruments of swaps and derivatives. Such an arrangement complies with the regulatory framework and enables the entry of traditional investors into crypto markets via a regulated instrument.
Focus on Top Digital Assets
The CoinDesk 20 Index has the largest cryptocurrencies like Bitcoin, Ethereum, XRP, and Solana. These assets hold the highest weights in the index. The selection excludes memecoins, stablecoins, and wrapped tokens. It also prioritizes liquidity and market cap.
Solana remains one of the largest components after Bitcoin, Ethereum, and XRP. The index undergoes a quarterly rebalance to adjust for market shifts. Other included assets are Cardano, Avalanche, and similar well-established coins.
The ETF will not invest more than 25% of its assets in a Cayman Islands subsidiary. This entity will help implement some of the fund’s derivative strategies. This structure ensures the fund remains compliant with U.S. tax rules.
Rising Competition Among Crypto ETFs
ProShares is not alone in the race to launch diversified crypto ETFs. VanEck recently revised its Solana ETF proposal, lowering fees to increase its appeal. It’s now listed on the DTCC site, but cannot launch until the SEC gives final approval . Other firms, including 21Shares, have also updated filings for funds tied to different crypto assets.
REX–Osprey has joined the competition with filings for ETFs tracking altcoins such as ADA, XLM, and SUI. The filing numbers are on the rise, indicating an increasing interest of institutional investors. In July, Cboe BZX filed to list a Solana ETF that would offer direct exposure to SOL. The objectives of these products are to offer greater exposure and limit the risks of individual asset investments.
The Bloomberg data shows that there are 155 active crypto ETF and ETP filings in the U.S. These reports cover 35 types of cryptocurrencies. Analysts expect the number of applications to exceed 200 within a year.
Institutional Demand Drives Product Expansion
In 2021, ProShares introduced the first crypto fund, a Bitcoin futures ETF. It has since increased the products it offers. The new filing reflects rising demand for diversified digital asset exposure. Institutional investors are seeking tools that lower volatility while maintaining access to growth. Earlier, the SEC approved ProShares Trust to launch three XRP futures-based ETFs.
If approved, the ProShares CoinDesk Crypto 20 ETF would become one of the first diversified crypto ETFs in the country. The fund could mark another step in the broader acceptance of digital assets in traditional portfolios.
