OKEx launches cryptocurrency exchange-traded fund
Hong Kong-based digital currency exchange OKEx announced on Tuesday the launch of a cryptocurrency exchange-traded fund that will track the performance of a basket of six digital tokens.
OKEx, reported to be the world’s biggest crypto-asset exchange by both trading volume and markets served, has branded its new offering as OK06 Exchange-Traded Tracker (OK06ETT).
The fund will initially track the combined performances of six cryptocurrencies against the US dollar-pegged tether (USDT) cryptocurrency. The six constituents are bitcoin, ethereum, litecoin, bitcoin cash, eos and the platform’s own OKB token.
OKEx will periodically reshuffle the constituents, although OKB will have a default entry. Other tokens must be among the top 10% in average daily trading volumes against tether measured by a 30-day rolling average. The value of each traded unit of the ETF will be measured in USDT.
OKEx said the objective of the ETF was to “bring satisfactory long-term returns to traders and also to satisfy their needs of diversifying their portfolios.”
While there is no administration fee, OKEx will charge a 0.2% redemption fee. Subscription fees are also under consideration. The minimum investment is to be set at around $100 for anyone eligible to trade on the index.
The launch of OK06ETT comes just days after rival exchange Huobi – based in Singapore – announced what it said was the world’s first cryptocurrency ETF, the Huobi 10.
For the time being, regional operations and regulatory restrictions will ensure both products can only be traded in the same countries in which the wider exchange platform operates. This will restrict investors in the US from trading both products.
US crypto ETFs rejected
Several US fund providers, including ProShares, have had their proposals to offer ETFs rejected by the Securities and Exchange Commission until more stringent investor protections can be applied.
An SEC document dated 23 March, however, suggested the regulator was opening up a debate to consider changing the ruling and to allow ProShares Bitcoin ETFs to be listed on the NYSE Arca exchange.
“Interested persons are invited to submit written data, views, and arguments regarding whether the proposal should be approved or disapproved,” the SEC document said.