Crypto trading platform Huobi is preparing to launch a crypto-based exchange-traded fund which is an investment option that will allow retail investors to gain exposure to more assets instead of just one at a time.
The company announced that the investment instrument which is called HB10 is open for subscriptions, but it only accepts purchases using cryptos instead of fiat currencies.
The new product will replicate the Huobi 10 index
They also announced that the new product is set to replicate the Huobi 10 index which was recently launched in order to track ten different assets on Huobi Pro exchange in real time based on their liquidity and market cap.
The index uses weight samples to reflect the overall market performance on Huobi Pro. Huobi aims to support HB10 to diversify risks for retail investors while also offering them significant exposure to the most important crypto assets.
The product’s availability
The company also added that the product would become available for institutional investors and it could potentially “reduce the impact of institutional entry and exit” on a single cryptocurrency.
It seems that the new offering will have a similar restriction rule as Huobi Pro.
For example, while it will still be available for investors from China, the new service notably excludes those from the U.S., given a regulatory uncertainty on cryptocurrency related ETFs in the country.
“HB10 will use the full replication method, and its holdings are adjusted according to the component coin pairs of Huobi main force index and their weights, to effectively track the underlying index trend,” the official description reads.
“By exchanging for HB10, users can hold Huobi main force index. Users can have the opportunity to exchange for a basket of corresponding digital assets so that they can invest in a non-systemic risk diversification digital asset portfolio with fewer virtual currencies,” the official website announces, continuing to say that “in a non-one-sided market, HB10 can help to provide users with a risk-distributed and diversely targeted tool for long-term digital asset exchange.”