Binance Is Launching Its Own Version of a Crypto ETF

The great Binance is launching a special product on the market. The stock exchange platform has a kind of index fund launched, which allows you to invest in the top 10 largest coins on the market at the touch of a button. It’s about a Equal Weighted Indexwhich means that each coin makes up 10 percent of the portfolio.

Not based on market cap

The Index is therefore not composed on the basis of market cap. At the time of writing, Bitcoin, Ethereum, BNB, XRP, Solana, Matic, Polkadot, Cardano, and AVAX are in the portfolio. All for 10 percent, because normally Bitcoin and Ethereum would take up by far the largest part of this portfolio if you look at the market cap.

Binance weighted index

It is also striking that they do not work with stablecoins, which in itself would have given an interesting dynamic. What you often see is that the supply of stablecoins grows when investors want to take risk off the table, which may also be interesting for an ETF like this. On the other hand, this creates more risk and that can theoretically lead to higher profits, but of course it can also fall the other way.

More to come

However, it does not stop with this fund. If it is up to Binance, there will be a lot of other index funds in the future. “We ultimately want to create index funds for more digital assets across a diverse set of products,” Binance said in its statement. Despite the long crypto winter, exchange platforms such as Binance continue to develop and prepare for a possible new bull market.

Of course, no one knows for sure if and when that bull market will come, but the feeling with many people is that it can’t be long. Although in the past we sometimes had to wait years for new all-time highs. In that regard, it is not even a year ago that Bitcoin touched the price of $ 69,000. It may well take another 2 to 3 years before we start climbing again.

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