21Shares introduced two new cryptocurrency index ETFs that offer regulated exposure to Bitcoin, Ethereum, Solana, and Dogecoin. The launch marks the first time crypto index ETFs registered under the Investment Company Act of 1940 have entered the market. The move expands options for investors seeking diversified digital asset access.
According to a recent report, the two funds are known as the 21Shares FTSE Crypto 10 Index ETF, with the ticker TTOP, and the 21Shares FTSE Crypto 10 ex-BTC Index ETF, with the ticker TXBC. Both made their debut in the market on Thursday. The new products, the company said, were created as a response to growing demand for an easy onramp into the crypto market.
Shift Toward Simplified Crypto Market Access
Both ETFs were developed together with Teucrium. The structure lets the funds derive their exposure not through direct holdings, but through publicly traded securities.These rules aim to limit conflicts of interest and strengthen investor protection under the 1940 Act.
Many clients prefer a single way to get broad exposure to the market as opposed to picking individual assets, 21Shares said. The two ETFs were launched to address that demand, the firm said. The acts are different from the perspective of reaction to market and adjusting.
TTOP has a management fee of 0.50%. It follows a market-cap-weighted index of the ten largest cryptocurrencies. TXBC has a fee of 0.65% but does not include Bitcoin. It’s interested in those crypto networks that are created around real-world blockchain use cases, not Bitcoin’s role as a macro hedge.
Both ETFs were launched with adviser Teucrium. The partnership uses a framework that allows the funds to gain exposure through publicly traded securities rather than direct holdings. The 1940 Act structure includes rules meant to reduce conflicts of interest and protect investors.
A Different Regulatory Path for Crypto ETFs
Most crypto ETFs have come to market under the 1933 Securities Act. This category applies to products that pose more risk and have structures akin to a commodity pool. 21Shares’ decision to use the 1940 Act distinguishes these ETFs from most other crypto vehicles.
Professional investors often prefer 1940 Act funds such as theirs, the company said in part because they are subject to established standards and tax treatment. Teucrium has experience bringing commodity-linked products to market in this form. That experience informed the design of the two new crypto ETFs.
The multi-coin crypto fund will continue to gain traction gradually. Those spot Bitcoin ETFs have already grown faster earlier in 2024. Retail buyers are attracted to single-asset products.
The exchange-traded funds debut at a time of volatility. Bitcoin has slipped below $100,000 for the first time since June. Investors displayed more prudence and sold more to take higher profits. This could affect the early flows of money.
The debut also comes as asset managers vie for attention in a burgeoning landscape of spot crypto ETFs tied to different altcoins. Several companies have plans for index funds themselves that follow many different assets.
There were only two multi-coin crypto index ETFs before this one. Both were 1933 Act funds. Grayscale’s Digital Large Cap Fund became an ETF in September. Hashdex itself had already introduced a multi-asset product. T. Rowe Price has also filed for a comparable fund. However, Bitwise is seeking approval to convert a 10-coin fund into an ETF.