Ben Strack

<div id="highlights-block_62a1de3c35103" class="highlights">
 <ul>
 <li>Firm could look to bring crypto products focused on yield or volatility management, digital assets product head Adam Sze says</li>
 <li>Sze seeks to combine experience in traditional finance and crypto ETPs at the thematic ETF issuer</li>
 </ul>
 
</div>



A new head of digital asset products at Global X is hoping to bring his traditional finance and crypto ETP background to build out educational resources and add to the company’s thematic product lineup.



The New York-based fund group <a href="https://cms.blockworks.co/global-x-poaches-21shares-exec-to-lead-digital-assets-product-push/" target="_blank" rel="noreferrer noopener">brought aboard</a> Adam Sze last month from Swiss ETP (exchange-traded product) issuer 21Shares. Before that, he worked for more than a decade at New York Life Investments, including as the firm’s director of product development.&nbsp;



Sze began learning about crypto in late 2017, and though New York Life considered launching products within the space, he said, the company ultimately decided against it.



The executive jumped ship to 21Shares in August 2021 and spent the latter half of his 10-month tenure there as director of ETPs. Sze led the design, implementation and launch of more than a dozen physically-backed <a href="https://cms.blockworks.co/21-shares-expands-crypto-etps/" target="_blank" rel="noreferrer noopener">crypto ETPs</a> for the company, which manages more than $2 billion in assets.



“At 21Shares, I was able to combine my professional pursuits and my personal interests into a single role…I learned a lot about structuring digital asset products and also got a deeper education in the space,” he told Blockworks. “Now that I’m at Global X, I have the opportunity to get even more involved in the strategic planning and implementation for the firm’s digital asset initiative.”



Global X has 93 ETFs trading in the US with combined assets of roughly $40 billion, according to ETF.com. Its Global X Blockchain ETF (BKCH), which tracks a market cap-weighted index of companies in the blockchain space, launched last July and has about $60 million in assets.



The firm brought to market its Blockchain and Bitcoin Strategy ETF (BITS), which blends investments in crypto stocks and bitcoin futures contracts, last November. That actively managed fund oversees about $10 million.



<blockquote class="wp-block-quote">“While it’s nice to have single-asset ETPs…I think where we’re truly going to make an impact and make a win is bringing out innovative solutions that address specific client needs, whether that’s yield or volatility management,” Sze said.&nbsp;</blockquote>



In addition to addressing such needs, the company seeks to offer exposure to certain sectors of the digital asset space through index-based products, though Sze declined to share specific segments the firm could target.&nbsp;



Matt Hougan, Bitwise Asset Management&#8217;s chief investment officer, noted during a panel at last month’s Permissionless event that he expects the share of indexing in the crypto space to rise from below 1% to 20% or 30% in the next 10 years.



Despite a focus on index-based products, Global X is mulling whether to re-apply for its proposed spot bitcoin ETF, Sze said, which the SEC rejected earlier this year.



Sze added that education is paramount for increasing adoption of digital asset investment products. While Global X aims to bolster its thought leadership to help financial advisers educate their clients on the space, the firm also intends to make its research available to retail investors.



The ongoing downturn in crypto markets won’t impact how Global X thinks about new crypto products, Sze said. Still, he explained, the drawdown — coupled with macro headwinds such as elevated inflation, rising interest rates, and supply chain issues — could affect the adoption timeline of such offerings.



“I think in the near term, there’s likely going to be muted interest in not only digital assets but risk assets as a whole as investors flock to safety,” he said. “But longer term, I think digital assets remain very compelling.”



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Global X Plots Expansion of Crypto Products, Research

<div id="highlights-block_629f480d80866" class="highlights">
 <ul>
 <li>The Ball Multicoin Bitwise Metaverse Index’s top holdings include ether, chainlink, solana, filecoin and polygon</li>
 <li>Ball said he expects tens of trillions in value to be created and reallocated to support the metaverse in the coming decades</li>
 </ul>
 
</div>



Bitwise Asset Management has joined forces with Multicoin Capital and the managing partner of EpyllionCo to launch an index that offers exposure to cryptoassets central to the metaverse.



The Ball Multicoin Bitwise Metaverse Index is set to include up to 40 assets, the companies revealed Tuesday, and a fund tracking the index is now available to qualified purchasers for private placement subscription with a $100,000 minimum investment.



San Francisco-based Bitwise had more than $1.2 billion as of March 31. In 2017 it created what is now the world’s largest crypto index fund — <a href="https://bitwiseinvestments.com/crypto-funds/bitw" target="_blank" rel="noreferrer noopener">the Bitwise 10 Crypto Index Fund</a> — and expanded to other sectors, launching <a href="https://bitwiseinvestments.com/crypto-funds/defi" target="_blank" rel="noreferrer noopener">a DeFi fund</a> and an <a href="https://bitwiseinvestments.com/crypto-funds/nft" target="_blank" rel="noreferrer noopener">NFT-focused fund</a> last year.



The company has partnered with crypto investment firm Multicoin Capital and Matthew Ball, a venture capitalist and managing partner of EpyllionCo, which operates an early-stage venture fund. Ball co-founded the <a href="https://www.roundhillinvestments.com/etf/metv/" target="_blank" rel="noreferrer noopener">Roundhill Ball Metaverse ETF</a> (METV) that launched in June 2021 and has $539 million in assets.



“We really assembled a dream team of experts around this topic, and I’m excited by the index and fund that’s come out of it,” Bitwise Chief Investment Officer Matt Hougan told Blockworks.&nbsp;



<blockquote class="wp-block-quote">“The metaverse is a big opportunity and, if it’s going to succeed, it’s going to be built to a significant degree on crypto and public blockchains. This strategy captures that opportunity set.”</blockquote>



The Ball Multicoin Bitwise Metaverse Index focuses on four sectors: interoperability, ledgers, DeFi (decentralized finance) and the enabling of communities. Top holdings are ether (ETH), chainlink (LINK), solana (SOL), filecoin (FIL) and polygon (MATIC). Others include the sandbox (SAND) and decentraland (MANA).



It screens for risks around liquidity, regulation and asset integrity, and adds discretionary overweights to increase exposure to assets that, in the view of the index’s governing committee, have high growth potential.



Ball said in a statement that he expects tens of trillions in value to be created and reallocated to support the metaverse in the coming decades. Multicoin Capital Managing Partner Kyle Samani called the metaverse “one of the most audacious and exciting ideas ever conceived.”



“However, in order for it to be vastly accessible, it must be built on an open, decentralized, credibly neutral foundation, which means it must be built in large part with crypto assets and public blockchains,&#8221; Samani said in a statement. &#8220;With literally thousands of crypto assets to choose from, underwriting the most investable opportunities is a never-ending challenge.”&nbsp;



Hougan noted during a panel at last month’s Permissionless event that while indexing within crypto remains “super tiny,” he expects the share of indexing in the space to rise from below 1% to 20% or 30% in the next 10 years.&nbsp;



He added that innovation within crypto indexing will likely come in the form of yield strategies, or indexes catering to investors targeting specific sectors.&nbsp;



“You’re going to see the same Cambrian explosion of indexing strategies that allow people to express themselves in crypto without picking individual tokens, which has just a huge amount of idiosyncratic risk…that I think people will be increasingly less comfortable taking,” Hougan said.



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Bitwise, Multicoin Capital Spin Up Metaverse Index and Fund

Shalini Nagarajan

<div id="highlights-block_6299e4fe84c1f" class="highlights">
 <ul>
 <li>The CRE8 index measures the performance of the Indian crypto market in rupees, rather than US dollars</li>
 <li>Dollar-denominated crypto indexes aren’t accurate representations for Indian investors, CoinSwitch’s CEO said</li>
 </ul>
 
</div>



Indian cryptocurrency exchange CoinSwitch on Thursday launched the country’s maiden benchmark altcoin index to track the performance of the rupee-based crypto market.



Based on real-time transactions on the CoinSwitch app, CRE8 — the <a href="https://coinswitch.co/blog/coinswitch-cre8/" target="_blank" rel="noreferrer noopener">Crypto Rupee Index</a> — tracks eight of the most highly-traded cryptocurrencies in the Indian market: bitcoin, ether, BNB, XRP, cardano, solana, polkadot and dogecoin.&nbsp;



“The index addresses a gap in the market. Until now, Indian users had to rely on international [indexes] denominated mostly in US dollars to assess the market,” Ashish Singhal, co-founder and CEO of CoinSwitch, told Blockworks.



<blockquote class="wp-block-quote">“These [dollar indexes], however, do not provide a true picture of the Indian market as they do not take into account the demand and supply specific to the Indian rupee-based market, nor the INR exchange rate.”</blockquote>



The index represents the total market value of all cryptoassets traded in the Indian market relative to a base date of October 1, 2020, and a base value of 1,000 Indian rupees ($12.90), rather than in US dollars. Data will be refreshed 1,400 times a day to ensure the latest updates for observers and will be amended to include new constituents each quarter.&nbsp;



The CRE8 index was last up 0.88% at press time, but is down 44% in the past 12 months.



In the US, investors can track various similar benchmarks, such as the <a href="https://www.spglobal.com/spdji/en/index-family/digital-assets/cryptocurrency/#indices" target="_blank" rel="noreferrer noopener">S&amp;P Cryptocurrency Index</a> and the <a href="https://www.nasdaq.com/crypto-index" target="_blank" rel="noreferrer noopener">Nasdaq Crypto Index</a>. Digital-asset investing firm CoinShares also maintains several <a href="https://coinshares.com/products-services/index-strategies" target="_blank" rel="noreferrer noopener">indexes</a> that track cryptoassets, designed to suit investors with distinct exposures.



Valued at nearly $2 billion, CoinSwitch is a prominent crypto exchange in India that is backed by investors including Andreessen Horowitz (a16z), Coinbase Ventures, Tiger Global and Sequoia Capital. It has 18 million registered users, according to company-provided figures.



Trading volumes in India plummeted <a href="https://www.coindesk.com/markets/2022/04/27/first-mover-asia-trading-on-indian-crypto-exchange-continues-to-slump-following-new-tax-laws-cryptos-higher/" target="_blank" rel="noreferrer noopener">as much as 60%</a> in April after the government <a href="https://cms.blockworks.co/indias-crypto-tax-takes-effect-with-industry-fearing-it-will-stifle-growth/" target="_blank" rel="noreferrer noopener">imposed a 30% tax</a> on crypto earnings, which some criticized as a drastic move that crushes the digital asset economy of the country.



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India’s CoinSwitch Exchange Rolls Out Rupee-based Altcoin Index

<div id="highlights-block_628e7760df2e3" class="highlights">
 <ul>
 <li>Phuture’s head of growth expects the next tens of millions of crypto users to want “simple exposure” to decentralized finance</li>
 <li>Top assets in the index include Uniswap, Aave, Lido DAO Token and Compound</li>
 </ul>
 
</div>



Decentralized crypto index platform <a href="http://phuture.finance">Phuture</a> has launched its first product as the company looks to satisfy demand from investors seeking exposure to “blue-chip” DeFi assets.



The Phuture DeFi Index (PDI), available on the Phuture app and Bancor pools, is designed for those who have dabbled in bitcoin and ethereum and are now looking to invest beyond crypto’s two largest assets.



Phuture Head of Growth Charles Storry called the crypto index space a nascent segment with no clear winner. Though roughly 18% of the global stock market is held in indices, he added, less than 1% of the total value locked in decentralized finance (DeFi) are held in index products today.&nbsp;



“We believe that the next million, or the next tens of millions, of users coming into the space will want to do so via simple exposure and won’t be looking to manage that themselves,” Storry told Blockworks. “We think that’s insane.”



The company considers a range of token characteristics when choosing the index constituents, such as its usefulness, its role within crypto infrastructure, how long it’s been operational and its liquidity.&nbsp;



Managed by code, the index is automatically rebalanced monthly. No one asset can account for more than 30% of the index.



PDI initially invests in seven assets, with the largest allocations — about 30% each — going to Uniswap (UNI) and Aave (AAVE), followed by Lido DAO Token (LDO) and Compound (COMP). Other assets include Yearn.finance (YFI), SushiSwap (SUSHI) and Alchemix (ALCX).



The launch comes as the number of DeFi users has grown about 25 times from two years ago, <a href="https://dune.com/rchen8/defi-users-over-time" target="_blank" rel="noreferrer noopener">according to crypto data firm Dune Analytics</a>, reaching more than 4.7 million. Total value locked (TVL) in the space stands at $112 billion, <a href="https://defillama.com">Defi Llama data show</a>.



The leading DeFi Index by marketcap is the DeFi Pulse Index (DPI), with $47 million in TVL. The index, which launched in September 2020, currently has as its <a href="https://www.tokensets.com/portfolio/dpi" target="_blank" rel="noreferrer noopener">top assets</a>, Uniswap (UNI), Aave (AAVE), Maker (MKR), Loopring (LRC) and Synthetix (SNX), making up about 76% of overall assets.



The <a href="https://cms.blockworks.co/?s=terra" target="_blank" rel="noreferrer noopener">crash of algorithmic stablecoin TerraUSD</a> (UST) earlier this month has shifted investor mindsets, according to Phuture Head of Product Oliver Mehr, saying “safety is becoming cool again.”



“There is a flight to quality,” Mehr said. “They’re looking for assets that have stood the test of time, that are non-experimental, that have revenue and users and are real businesses.”



As a result, Phuture has excluded governance tokens of algorithmic stablecoins until the firm sees more evidence that they can survive multiple cycles of investor apathy and distress, he said.&nbsp;



Despite the growth of DeFi, the index launch comes as token prices have declined in recent months. UNI traded at $5.52 on Wednesday afternoon — down about 37% in the last month and 78% from a year ago.



<blockquote class="wp-block-quote">“We think it’s an even better time to be investing into these blue-chip assets due to the dislocation between the underlying business models and the price,” Mehr said.&nbsp;</blockquote>



Founded in 2019, Phuture intends for PDI to be the first in a suite of index products, expecting continued growth in DeFi and GameFi within the next couple of years.



The company said in April that it was partnering with Colonylab to launch the Colony Avalanche Ecosystem Index, which will follow the PDI launch.



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New DeFi Index Targets ‘Proven’ Blue-chip Assets

<div id="highlights-block_6215454be0bb6" class="highlights">
 <ul>
 <li>The index comprises 13 cryptoassets, with bitcoin and ether making up a combined 53%</li>
 <li>Separately managed accounts are the best way to get diversified crypto exposure in the US, WisdomTree CIO says</li>
 </ul>
 
</div>



A crypto index devised by WidsomTree Investments and Ritholtz Wealth Management is set to become more widely available next week as more financial professionals have indicated interest in the space.



The RWM WisdomTree Crypto Index (RTREE) — available via a separately managed account (SMA) — was made available<a href="https://cms.blockworks.co/wisdomtree-and-ritholtz-wealth-management-launch-crypto-index/" target="_blank" rel="noreferrer noopener"> to Ritholtz clients in December</a>.



In the time since, Ritholtz has opened, funded and invested client cash as it fine-tunes operations, according to Michael Batnick, the wealth management firm&#8217;s managing partner.



“There’s a lot that needs to go into making sure that advisers can get comfortable here, because a lot of people are wary of crypto in general,” Batnick told Blockworks. “So, any sort of funkiness or glitch in the matrix and people will get very nervous.”



Roughly 200 advisers have expressed interest in the index, Batnick added. And Ritholtz is in talks with several multibillion-dollar registered investment advisers (RIAs) about the offering.



The index will become available to all advisers on March 1 through Onramp Invest, which supplies the SMA architecture, rebalancing technology and adviser support. Crypto platform Gemini is its custodian.



Ritholtz and WisdomTree will split a fee of 50 basis points from new investors, while Gemini and Onramp will split a one-time transaction fee of 70bps.



WisdomTree Chief Investment Officer Jeremy Schwartz said during a virtual event Tuesday that the index aims to offer exposure to bitcoin and ether, while capturing potential upside in altcoins.



Bitcoin and ether currently account for 36% and 17% of the index, respectively. Allocations to 11 other coins — Terra (LUNA), Uniswap (UNI), Chainlink (LINK), Polygon (MATIC), Decentraland (MANA), Fantom (FTM), The Graph (GRT), Aave (AAVE), Enjin Coin (ENJ), Yearn.finance (YFI) and SushiSwap (SUSHI) — range from 3% to 7%.



<div class="wp-block-image"><figure class="alignleft size-large"><img loading="lazy" decoding="async" width="1024" height="550" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/02/RWM-WisdomTree-Crypto-Index-Exposures-1024x550.jpg" alt="" class="wp-image-17731" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/02/RWM-WisdomTree-Crypto-Index-Exposures-1024x550.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/RWM-WisdomTree-Crypto-Index-Exposures-1024x550.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/RWM-WisdomTree-Crypto-Index-Exposures-1024x550.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/RWM-WisdomTree-Crypto-Index-Exposures-1024x550.jpg?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/RWM-WisdomTree-Crypto-Index-Exposures-1024x550.jpg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/RWM-WisdomTree-Crypto-Index-Exposures-1024x550.jpg?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/RWM-WisdomTree-Crypto-Index-Exposures-1024x550.jpg?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/RWM-WisdomTree-Crypto-Index-Exposures-1024x550.jpg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/RWM-WisdomTree-Crypto-Index-Exposures-1024x550.jpg?w=50 50w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/RWM-WisdomTree-Crypto-Index-Exposures-1024x550.jpg?w=1862 1862w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Source: WisdomTree</figcaption></figure></div>



The plan is to review exposures monthly. Avalanche (AVAX), which Gemini doesn’t support, is an asset WisdomTree could add in the future, Schwartz said.



<h3 class="wp-block-heading">Looking to fill a void</h3>



The launch comes on the heels of financial advisers increasingly looking to invest client funds in crypto. <a href="https://cms.blockworks.co/financial-advisors-bullish-on-crypto/" target="_blank" rel="noreferrer noopener">A survey</a> by Bitwise Asset Management and ETF Trends last month found the percentage of financial professionals investing client funds in crypto rose from 9% to 15% over the past year.



An additional 14% said they will “probably” or “definitely” buy crypto this year, according to <a href="https://static.bitwiseinvestments.com/Research/Bitwise-ETF-Trends-2022-Benchmark-Survey.pdf" target="_blank" rel="noreferrer noopener">the research</a>.



“I believe in holding the underlying but in a package that is very similar to what advisers are used to,” Onramp Invest CEO Tyrone Ross Jr. said during the virtual event. “You shouldn’t be scared or worried about custody or cold wallets or hot wallets or anything like that. Let’s take that away.”



Though WisdomTree <a href="https://cms.blockworks.co/wisdomtree-launches-spot-etps-in-europe/" target="_blank" rel="noreferrer noopener">has launched</a> exchange-traded products (ETPs) that offer diversified crypto exposure in Europe, the SEC <a href="https://cms.blockworks.co/when-will-the-sec-approve-a-spot-bitcoin-etf/" target="_blank" rel="noreferrer noopener">has not yet allowed</a> spot crypto ETFs in the US. Schwartz called bitcoin futures ETFs, which the SEC approved in October, “suboptimal” products.



“We saw…from our experience that the SMA is probably going to be the best structure for a long period of time — for sure if you want this diversified exposure,” Schwartz said.



The index is set to launch as crypto markets have dipped recently. Bitcoin is down about 25% since Ritholtz began testing the index, and some altcoins are down even more.&nbsp;



“Obviously it’s not ideal,” he said. “I wish that it had gone the other way, but by no means does this change how we feel about allocating money here.”



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