Crypto Index ETFs To Take Next Wave Of Adoption, Says Exec

WisdomTree’s head of digital assets, Will Peck, anticipates that exchange-traded funds (ETF) that hold diversified baskets of cryptocurrencies will fill a significant gap in the market in the coming years.

“It does seem like that’s going to be one of the next waves of adoption,” Peck told Cointelegraph at The Bridge conference in New York City on Wednesday. “It solves a need, I think,” he added.

Peck explained that although many new investors now understand the concept of Bitcoin (BTC), they often struggle to judge the “next 20 range of assets.” He said a multi-asset crypto basket provides them with exposure to the sector while mitigating the “idiosyncratic risk” of investing in individual tokens.

Will Peck says index ETF investors will be backing the tech

“Crypto we talked about as an asset class, but it’s really a technology, and the underlying return drivers of each of these tokens are actually quite different, even though they’re correlated, generally, just because that’s where the market is,” he explained.

Will Peck spoke to Cointelegraph at The Bridge conference in New York City on Wednesday. Source: Cointelegraph

It comes as several crypto index ETFs have launched this year. Most recently, on Thursday, asset manager 21Shares launched two crypto Index ETFs, which are regulated under the Investment Company Act of 1940.

Just a couple of months prior, on Sept. 25, asset manager Hashdex expanded its Crypto Index US ETF to include XRP (XRP), SOL (SOL), and Stellar (XLM), following the generic listing rule change from the Securities and Exchange Commission (SEC).

Peck said the timing of broader adoption for crypto index ETFs is “tough exactly to forecast,” but suggested it may be inevitable given the straightforward utility of having a product that provides such exposure.

Peck expects a surge in new crypto ETF launches as ETF issuers compete for early advantage, which he said may erode the idea that an ETF automatically signals the cryptocurrency token has any authority or credibility.