Huobi has announced a cryptocurrency ETF which will be focused in crypto and blockchain companies in China and South Korea. The announcement of the launch surprised everyone because it was just unveiled yesterday. Find out about the plans for the new listed fund belonging to the third largest cryptocurrency exchange in the market!
The new financial derivative, now adopted by the exchange company Huobi, is in the speculative markets, in general, which is stealing all the looks of the investments of a time here, it is the ETF (Exchange Trade Funds).
ETF are investment funds that have the particularity that they are quoted on the stock market -as an action-, being able to buy and sell throughout a session at the existing price at any time, without having to wait for the closing of the market to know the liquidated value, to which the subscription-refund is made.
ETFs are characterized by the fact that the main objective of their investment policy is to reproduce a specific stock exchange or fixed income index, and their shares are admitted to trading on stock exchanges.
Its main feature is that its holdings trade in electronic stock markets in real time with the same characteristics that apply to any other listed security. They must be admitted to trading on a stock exchange, for which they must have the endorsement of the respective authority of the stock market. The novelty that Huobi presents now is the launch of its ETF for cryptocurrencies.
Crypto-based Exchange Traded Fund
A crypto-ETF would be like a mutual fund that divides the property of the cryptoactives into shares, tracing the value of negotiable cryptoactives during working hours in an exchange. Involuntary shareholders are entitled to a portion of the profits of the Huobi fund, which would be based on the interest earned within a fixed period or also through short-term speculation on the daily fluctuations of the crypto-market.
The new fund named Huobi 10 (HB10) is based on the market index of the top 10 most-quoted cryptocurrencies on the stock exchange against Tether (USDT).
The new investment instrument is intended to help new users to gain exposure in the cryptocurrency markets, granting them a share in a diversified basket. That is, investors who do not want to follow cryptocurrencies individually can buy according to the general trend of the market and thus save time by discarding the flutter generated around other cryptocurrencies. How much will this affect the competitive market or the fact of wanting to bet on new cryptocurrencies in the future?
The fund will be funding companies in China and South Korea and is expected to raise $93 million to invest in blockchain startups, as well as to encourage cooperation between blockchain projects in the two nations. The companies involved in the first batch of subscribers to the fund are: NewMargin Capital, a Chinese investment company, the Korean securities firm Kiwoom Securities, the Korea Development Bank and the Industrial Bank Of Korea.
The exchange company Binance, direct competition of Huobi, also announced today that it will launch a Social Impact Fund valued at $ 1 billion to boost the growth of blockchain and cryptocurrency startups.