The Bloomberg DeFi Index covers eleven DeFi protocols, and the DeFi ETF would be the first of its type.
On the Brazilian Stock Exchange, QR Assets, a crypto asset management from Brazil, has created a decentralised finance exchange-traded fund, or DeFi ETF.
It would track the Bloomberg Defi index and invest 100 percent of its assets in actual DeFi assets through the DeFi ETF QDFI11. All of these companies are included in the DeFi index, which includes Uniswap, AAVE, MakerDao, Compound, Yearn.finance, SushiSwap, 0X, Synthetix, and Curve (CRV). Gemini Fund Solution, a platform specifically designed for Crypto ETFs, would offer the ETF.
Investors wishing to diversify their cryptocurrency portfolios might use the ETF as a regulated alternative to established crypto assets like Bitcoin (BTC) and Ethereum (ETH) (ETH). ETFs offer investors a way to gain exposure to an emerging market without risking their capital. Defi is still out of reach for many traditional investors, despite the rise in popularity of crypto assets. The initial trading price of the ETF shares is expected to be around R$10 (ten reals).
Investors may expect the first DeFi ETF to be a significant step toward the maturation of the crypto market, according to QR Capital CEO Fernando Carvalho. He further said:
“Bitcoin and Ethereum ETFs were just the front door to an investment universe that is more rich and diverse. Now it’s time for QDFI11 and decentralized finance. More and more investors will gain access to innovative and disruptive investment products with the endorsement of regulators.”
With an estimated $200 billion locked away in dozens of protocols, DeFi became a very prominent crypto sector by 2021. More and more investors are looking to get involved in the DeFi movement, which has only been around for two years.
Nevertheless, the absence of a regulated ETF has discouraged traditional investors from participating in the market because of the inherent risks associated with unregistered ETFs and their security flaws.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.