Crypto Exchange OKEx Launches a Digital Currency-Based Exchange-Traded Fund

OKEx, the popular cryptocurrency exchange launched by OkCoin, announced the launch of its new cryptocurrency exchange-traded fund. This announcement comes just a day after Singapore-based cryptocurrency exchange Huobi announced its own ETF called Huobi10. This shows that more and more getting interested towards launching crypto-based trading products for its customers.

The new cryptocurrency ETF from OKEx is called OK06 Exchange-Traded Tracker (OK06ETT) which will allow investors to invest in six different cryptocurrencies including BTC, ETH, LTC, BCH, EOS and OKB (OKEx’s token). The fund will allow the shares of all these digital currencies to be traded against different crypto assets like the dollar-pegged USDT tokens.

Just like the Huobi’s HB10 ETF, OK06ETT will be available to retail investors for trading on the OKEx exchange with a minimum investment amount kept at $100. However, OKEx has said that for the tokens to be eligible for the index, they should be among the top ten percent in terms of the 30-day average trading volumes against the Tether. But, OKB will remain as the constituent token of OK06ETT by default, said an official.

The OK06ETT fund is designed by OKEx suitable for long-term investors while providing automated diversification and passive trading management. OKEx said that the OK06ETT fund is “To bring satisfactory returns to traders in long-term and also to satisfy traders’ needs of diversifying their portfolio. It tracks OK06ETT index as the benchmark because of its comprehensive and representable features. A fully-replicated passive trading managing method is adopted to minimize the error”.

Other popular firms from the crypto-space like Coinbase and Greyscale Investments have also launched digital currency index funds which restrict contributions to accredited investors. The funds that are launched by these companies require a large capital investment but come with a benefit of being held in tax-benefit accounts.

These traditionally-structured funds would be listed on over-the-counter (OTC) brokerage platforms thereby allowing the retail investors to purchase shares which would be trading at a steep premium to their NAV.