Key Takeaways
Which cryptocurrencies will the ETF focus on?
The ETF will primarily include Bitcoin, Ethereum, Ripple, and Solana, while excluding stablecoins, memecoins, and wrapped tokens.
Will the ETF hold cryptocurrencies directly?
Instead of holding crypto assets directly, ProShares will use total return swaps and derivatives to replicate the index’s performance through a Cayman Islands subsidiary.
ProShares, the asset manager behind the first U.S. Bitcoin [BTC] Futures ETF (BITO), is gearing up to broaden its presence in the digital asset market.
Details of ProShares CoinDesk Crypto 20 ETF
In a recent SEC filing, the firm revealed plans for the ProShares CoinDesk Crypto 20 ETF, a new fund designed to track the CoinDesk 20 Index.
According to the filing, the aforementioned ETF will track the CoinDesk 20 Index, which excludes stablecoins, memecoins, and wrapped tokens to maintain a focus on digital assets with strong liquidity and substantial market capitalization.
Additionally, the proposed ETF aims to give investors diversified exposure to the twenty largest and most liquid cryptocurrencies by market capitalization and trading volume. They include major assets such as Ethereum [ETH], Ripple [XRP], and Solana [SOL].
How is it different from spot ETFs?
Unlike spot ETFs, this fund will not hold cryptocurrencies directly.
Instead, ProShares plans to replicate the index’s performance synthetically through total return swaps and other derivatives, managed via a Cayman Islands subsidiary.
This structure enables the firm to bypass regulatory and custody barriers that often complicate direct crypto holdings.
However, it also introduces counterparty and derivative risks, which the firm outlines extensively in its risk disclosures.
Needless to say, the filing highlighted potential challenges, including market manipulation, high volatility, liquidity issues, and regulatory uncertainty. In fact, all these factors shape the SEC’s cautious view of crypto-linked financial products.
Should the ETF receive approval for listing on NYSE Arca, it will function through traditional cash-based creation and redemption mechanisms.
Ultimately, this will offer institutional investors broad crypto exposure without requiring them to hold or manage digital wallets directly.
Impact on the tokens
Meanwhile, at press time, Bitcoin was trading at $108,060.05 after a slight 0.07% rise, while Ethereum slipped 0.36% to $3,853.90.
Moreover, XRP fell 0.92% to $2.40, and Solana traded 0.21% lower at $184.10, according to CoinMarketCap.
This coincided with VanEck’s latest Solana ETF filing, reflecting the growing appetite for diversified, yield-generating crypto investment products.
While regulatory delays continue to test market patience, the sustained inflows into Solana, Ethereum, and XRP highlight investor optimism toward altcoin ETFs.
Therefore, as the U.S. government prepares to resume operations, the approval of such products could mark a pivotal step in expanding institutional exposure beyond Bitcoin and Ethereum.
Source: https://ambcrypto.com/could-proshares-top-20-crypto-etf-succeed-where-spot-etfs-stall/
