Ben Strack

<div id="highlights-block_6283a403e851b" class="highlights">
 <ul>
 <li>Products follow firm’s launch of Australia’s first spot bitcoin and ether ETPs</li>
 <li>21Shares sought to enter the US market last year by filing to offer a spot bitcoin ETF with Ark Invest</li>
 </ul>
 
</div>



The world&#8217;s largest issuer of crypto ETP has entered the US market with two index funds that offer diversified exposure to some of the space’s largest assets.



21Shares US Advisers has launched a Crypto Basket 10 Index Fund and a Crypto Mid-Cap Index Fund, the company said Wednesday. The private placements, which track indices developed by index provider <a href="https://vinter.co/" target="_blank" rel="noreferrer noopener">Vinter</a>, are available to accredited US investors. 



The Crypto Basket 10 Index Fund tracks the prices of the top 10 cryptocurrencies available on US exchanges, based on market capitalization. The Mid-Cap Index Fund, which omits exposure to bitcoin and ether, hones in on the next eight cryptoassets with the highest market caps.&nbsp;



Arthur Krause, 21Shares’ vice president of product, said in a statement that the cumulative return rate of the top dozen cryptocurrencies has greatly outperformed the S&amp;P 500, Dow Jones Industrial Average and Nasdaq Composite over long time periods.&nbsp;



“Our two new index funds enable accredited investors to participate in cryptocurrencies without assuming the responsibility of managing custodial arrangements, tracking private keys and passwords, or being susceptible to hacking or security breaches.”



The Switzerland-based firm sought to enter the US market by <a href="https://cms.blockworks.co/ark-files-for-bitcoin-etf/" target="_blank" rel="noreferrer noopener">filing last year</a> to offer a spot bitcoin ETF with Ark Invest. The SEC has not yet approved such a product.



While the index fund launches mark 21Shares’ first time offering products in the US, the company has aggressively built out its product range globally in recent years.



21Shares has added a handful of ETPs (exchange-traded products) to its product range in Europe so far this year. It brought to market a product that gives investors exposure to layer-1 blockchains last week and is set to launch another on Wednesday, <a href="https://cms.blockworks.co/21shares-two-latest-crypto-funds-keying-in-on-defi/" target="_blank" rel="noreferrer noopener">the firm revealed</a>. Both are listed in Switzerland. 



The country also <a href="https://cms.blockworks.co/first-spot-crypto-etfs-in-australia-underwhelm-traders-amid-market-downturn/" target="_blank" rel="noreferrer noopener">expanded its presence into Australia</a> last week, launching the continent’s first spot bitcoin and ether ETPs.



Ophelia Snyder, co-founder and president of 21Shares, previously told Blockworks the company is focused on moving to more geographies, noting that 21Shares intends to establish a Middle Eastern foothold next month via Dubai.



“Our mission globally is to build bridges into the crypto world,” 21Shares CEO Hany Rashwan said in a statement. “The two funds launched today are pivotal building blocks for US investors eager to introduce crypto to their portfolio or are looking for ways to diversify their cryptocurrency holdings.”



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World’s Largest Crypto ETP Issuer Enters US Market

<div id="highlights-block_627c2a44f0368" class="highlights">
 <ul>
 <li>Crypto investors have evolved from asking “superficial” questions to doing more “nuanced analysis,” 21Shares co-founder says</li>
 <li>The ETP issuer is seeking to expand its presence to the Middle East through Dubai</li>
 </ul>
 
</div>



Crypto-focused asset manager 21Shares has introduced two ETPs that give investors exposure to the nuts and bolts of DeFi.



The Switzerland-based company listed its Layer 1 ETP (LAY1) on the SIX Swiss Exchange on Thursday. The 21Shares DeFi 10 Infrastructure ETP (DEFII) is set to become available on the BX Swiss Exchange on May 18.



LAY1 tracks an index developed by index provider <a href="https://vinter.co/" target="_blank" rel="noreferrer noopener">Vinter</a> and includes the 15 largest, by market capitalization, layer-1 blockchains. There is a maximum weighting of 30% of an allocation per each blockchain, and rebalancing is conducted quarterly.



DEFII, which also tracks a Vinter index, focuses on DeFi (decentralized finance) applications and layer-1 blockchains — each segment representing half of the benchmark. The assets in both categories are ranked by market capitalization and likewise reweighted quarterly.&nbsp;



21Shares is the first issuer in Europe to launch an ETP (exchange-traded product) based on a DeFi index, according to the company. The products are available to investors across Europe, and 21Shares will look to cross-list them on additional regional exchanges.



The launches come as investors have shifted from “superficial” questions about crypto to more “nuanced analysis,” according to Ophelia Snyder, co-founder and president of 21Shares. Retail and institutional investors alike are after more diversification, she added.



<div class="wp-block-image"><figure class="aligncenter size-medium is-resized"><img loading="lazy" decoding="async" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/05/Ophelia-main-headshot-200x300.jpg" alt="" class="wp-image-21551" width="200" height="300" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/05/Ophelia-main-headshot-200x300.jpg?w=200 200w, https://blockworks-co.imgix.net/wp-content/uploads/2022/05/Ophelia-main-headshot-200x300.jpg?w=683 683w, https://blockworks-co.imgix.net/wp-content/uploads/2022/05/Ophelia-main-headshot-200x300.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/05/Ophelia-main-headshot-200x300.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/05/Ophelia-main-headshot-200x300.jpg?w=1365 1365w, https://blockworks-co.imgix.net/wp-content/uploads/2022/05/Ophelia-main-headshot-200x300.jpg?w=171 171w, https://blockworks-co.imgix.net/wp-content/uploads/2022/05/Ophelia-main-headshot-200x300.jpg?w=174 174w, https://blockworks-co.imgix.net/wp-content/uploads/2022/05/Ophelia-main-headshot-200x300.jpg?w=146 146w, https://blockworks-co.imgix.net/wp-content/uploads/2022/05/Ophelia-main-headshot-200x300.jpg?w=53 53w, https://blockworks-co.imgix.net/wp-content/uploads/2022/05/Ophelia-main-headshot-200x300.jpg?w=33 33w" sizes="auto, (max-width: 200px) 100vw, 200px" /><figcaption>Ophelia Snyder, 21Shares co-founder and president</figcaption></figure></div>



“We wanted to have products for people who were really interested in specific themes, but might not be going as deep on the relative performance of why Solana is better for high-frequency trading versus Ethereum versus something else,” Snyder told Blockworks.&nbsp;



21Shares has launched a handful of ETPs this year, such as products focused on Aave (AAVE), Chainlink (LINK) and Uniswap (UNI). CEO Hany Rashwan said earlier this year that <a href="https://cms.blockworks.co/21-shares-expands-crypto-etps/" target="_blank" rel="noreferrer noopener">the firm aims to support</a> what it considers to be the top 50 cryptocurrencies by year end. 



“We’re firm believers that you should be able to enter the crypto space in as many diverse ways as possible, very similar to what you can expect in commodities, equities or fixed income,” Snyder said.&nbsp;



The firm is also looking to expand geographically in the coming months.&nbsp;&nbsp;



21Shares recently launched the first <a href="https://cms.blockworks.co/first-australian-spot-bitcoin-ether-etfs-to-go-live-next-week/" target="_blank" rel="noreferrer noopener">spot bitcoin and ether ETFs in Australia</a> and hired Carl Hagerup to lead the company’s presence in the Nordics and Netherlands region.   



Snyder said that 21Shares is planning to establish a Middle Eastern foothold next month via Dubai — which <a href="https://cms.blockworks.co/dubai-is-the-latest-government-to-roll-out-crypto-law-set-up-regulator/" target="_blank" rel="noreferrer noopener">proposed its first cryptocurrency legislation</a> overseen by a new regulatory agency in March. More recently, Dubai’s crypto regulator said <a href="https://cms.blockworks.co/dubais-crypto-regulator-buys-land-in-the-metaverse-for-headquarters/" target="_blank" rel="noreferrer noopener">earlier this month</a> it would establish a virtual headquarters in the metaverse.



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21Shares’ Two Latest Crypto Funds Keying In on DeFi

<div id="highlights-block_6217f4af521b7" class="highlights">
 <ul>
 <li>The company seeks to launch indices for investors interested in crypto but worried about the energy usage of certain tokens, CEO says</li>
 <li>Vinter raised $3.4 million in January to expand its range of cryptoasset indices for ETP and ETF issuers</li>
 </ul>
 
</div>



Fresh off a funding round, Swedish crypto index provider Vinter has inked a deal with a digital assets derivatives exchange to provide pricing for its investment products.



Vinter’s single-asset indices are set to serve as the reference rate for D2X’s derivatives, giving institutional investors “clean” exposure, Vinter CEO Jacob Lindberg told Blockworks.&nbsp;



“Volumes in crypto derivatives continue to outperform spot volumes, and there are no indications of this growth slowing down, [so] it’s the perfect timing for a partnership like this,” Lindberg wrote in an email. “Furthermore, partnering with Vinter means D2X will be using crypto indexes that are already well-established and trusted in the European crypto [exchange-traded product] industry.”



Vinter — founded in what the company calls the “crypto winter” of 2019 — offers indices that track the price of assets including bitcoin, ether, cardano, polkadot, binance coin, uniswap, xinfin and tezos.



The company has also rolled out indices with several assets grouped by market capitalization or themes, including decentralized finance (DeFi) coins or tokens issued by centralized exchanges.



D2X said the Vinter deal will aid the exchange’s aims of developing a safe, regulated market infrastructure for derivatives in Europe.



The Amsterdam-based company offers cash-settled digital asset options and futures denominated in euros.



<h3 class="wp-block-heading">Future growth</h3>



Vinter raised $3.4 million in January to expand its range of cryptoasset indices for ETP and ETF issuers. Octopus Ventures led the seed round.



The cash injection is earmarked for hiring data experts to analyze risks and trends, as well as onboarding developers and technical engineers.



Zihao Xu, Octopus Ventures’ head of fintech, told Blockworks that crypto is due for a shift toward passive products “as demand for regulated exposure to cryptoassets increases” — from benchmark trackers to smart-beta strategies.



“The ability to create flexible products at scale is reliant on a robust index provider, and we believe Vinter is well placed to play that role,” Xu said.



Vinter is looking to introduce niche, customized indices to certain sectors, Lindberg said, including ones “suitable for investors interested in crypto but worried about the energy usage of certain tokens.”



<h3 class="wp-block-heading">Europe crypto ETFs are hot</h3>



Vinter has been in the thick of Europe’s crypto ETP (exchange-traded product) proliferation in recent months. Product launches across the continent have come as the Securities and Exchange Commission <a href="https://cms.blockworks.co/when-will-the-sec-approve-a-spot-bitcoin-etf/" target="_blank" rel="noreferrer noopener">has not yet approved</a> ETFs that hold crypto directly.



The security and convenience of crypto exposures through a regulated product is attractive to retail investors and often a necessity for institutional players, <a href="https://cms.blockworks.co/with-us-bitcoin-etf-in-limbo-crypto-exchange-traded-products-all-the-rage-in-europe/" target="_blank" rel="noreferrer noopener">issuers told Blockworks</a>.



Vinter is the index provider for Valour, Bytetree Asset Management, Wavebridge and 21Shares. The latter company, the world’s largest issuer of crypto ETPs, partnered with Vinter in September.



<a href="https://cms.blockworks.co/21shares-crypto-etp-in-europe-excludes-btc-and-eth/" target="_blank" rel="noreferrer noopener">It launched</a> an ETP tracking the Vinter 21Shares Crypto Mid-Cap Index, which excludes bitcoin and ethereum. <a href="https://cms.blockworks.co/21-shares-expands-crypto-etps/" target="_blank" rel="noreferrer noopener">21Shares intends</a> to offer access to what the firm considers the top 50 cryptocurrencies in ETP wrappers by the end of the year.



“Many begin their journey into crypto by purchasing BTC and ETH via financial wrappers like ETPs,” Lindberg told Blockworks at the time. “Once you learn more, a natural next step is to dive deeper, and when they find that many of them have outperformed BTC and ETH for the past year, they naturally get curious.”



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.