Two new cryptocurrency exchange-traded funds (ETFs) that hold a mix of Bitcoin (BTC) and Ether (ETH) have seen small amounts of money come in since they opened. Since its launch on February 20, the Franklin Crypto Index ETF (EZPZ) by Franklin Templeton has gained about $2.5 million in net assets. On the other hand, the Nasdaq Crypto Index US ETF (NCIQ) by Hashdex has earned just over $1 million since its launch on February 14.
These numbers are very different from how well single-asset ETFs have done. On its first trade day in January 2024, some $50 million came into the Franklin Bitcoin ETF (EZBC), a spot Bitcoin ETF. Similarly, Bitwise Bitcoin ETF (BITB) had an amazing $240 million worth of trade at its start. It has been slower for spot Ether ETFs to catch on, though. On their first day of trading on July 23, only $100 million came in net.
The Crypto Index ETF Appeal and Limitations
Unlike standard single-asset ETFs, these new funds aim to give U.S. investors a diversified crypto portfolio. They follow the averages of cryptocurrencies based on how much money each one is worth on the market. As of February 21 Bitcoin had a market cap of 1.9 trillion dollar, making it the most valuable cryptocurrency.
However, these funds can only hold Bitcoin and Ether because of government rules. So, they dont have access to other fast-growing altcoins like Solana and XRP, making them less appealing to buyers who want to buy a broader range of crypto assets.
Regulatory Changes and Future
NYSE Arca applied to offer a Greyscale ETF in October 2024. This ETF would hold various cryptocurrencies such as BTC, ETH, SOL and XRP. If accepted, this would be a big step forward for crypto ETFs as investors look for more ways to diversify their holdings.
While the US Securities and Exchange Commission is reviewing many applications for altcoin inclusive ETFs experts think approvals could come in 2025.
Conclusion
Small amounts of money counter the Franklin Crypto Index ETF and the Nasdaq Crypto Index US ETF, which show that investors are being careful about mixed-asset crypto ETFs. Single-asset Bitcoin ETFs are still the most popular, but government approvals for more diverse funds could lead to more people using Bitcoin.
