Canada-based Evolve Funds Group Inc. launched a new fund that holds both bitcoin and ethereum on the Toronto Stock Exchange on Thursday.
The Evolve Cryptocurrencies ETF (ETC) will hold the two cryptos weighted by their market caps, about 67% bitcoin and 33% ethereum. Evolve will rebalance the fund monthly.
Ethereum and Bitcoin have long been the two biggest cryptos on the market. Combined, they account for about 65% of the total cryptocurrency market.
Despite being the most popular cryptos, Bitcoin and Ether are actually quite different, and investors interested in crypto exposure benefit from holding each for different reasons.
Evolve President and CEO Raj Lala explained this difference in a press release from earlier this week, saying, “Bitcoin has established itself as a store of value and is often referred to as digital gold….Ether is often referred to as a digital oil and has become an essential building block for digital finance including NFTs and other DeFi applications.”
Additionally, Ether and Bitcoin can see varied returns, despite trending in a similar direction. In 2020, for example, Ether outperformed Bitcoin by over 150%. In 2019, Bitcoin saw a 90% return, while Ether performed negatively.
Combining Ether and Bitcoin in a single product is a simple way to diversify a crypto portfolio.
ETC has no management fee. However, the underlying funds which hold both bitcoin and ether have management fees of 0.75% of net asset values plus applicable taxes. According to the official press release, ETC will not use leverage and does not intend to pay regular distributions.
Canada has launched several cryptocurrency ETFs thus far, including the Evolve Bitcoin ETF (EBIT) and the Evolve Ether ETF (ETHR).
The SEC has yet to approve any crypto ETFs, despite the 20+ crypto ETF proposals it currently has under review.
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