First Crypto ETF Lands In India — This Is What It Means For India’s 1.3 Billion Population
Invesco’s latest exchange-traded fund (ETF) is bringing the first crypto ETF to India, exposing the country’s investors to the crypto asset class and blockchain development.
Covered:
- First Crypto ETF In India
- India’s History With Crypto
— Bitcoin (@Bitcoin) November 16, 2021
In typical crypto fashion, Bitcoin and the overall market are crashing today (total market cap down 6.5% in the last 24 hours) on the bullish news that India, a nation of nearly 1.4 billion people, is approving its first crypto ETF.
The Investment management company Invesco is giving Indian investors exposure to widely-known blockchain technology companies through a new ETF that invests in multiple different sub-funds.
First Crypto ETF In India
Invesco’s CoinShares Global Blockchain ETF becomes available to investors on November 24th and closes on December 8th, according to CoinDesk. The fund may be a preferable option for investors who are nervous about investing in crypto but believe in the underlying benefit that blockchain technology can provide to businesses.
An unnamed senior financial executive says that approximately 65% of the ETF’s portfolio is allocated to blockchain-related companies and 35% is tied to companies providing crypto-related financial services or mining operations.
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While it doesn’t give direct exposure to specific cryptocurrencies, the ETF contains a basket of 50 different companies that are tied to the blockchain ecosystem. Some of the companies included in the fund are Galaxy Digital, Square, Tesla, GMO Internet, and its largest allocation (4.83%), Coinbase.
Crypto ETF expert Laurent Kssis, director of CEC Capital, further clarifies that the fund is merely a “feeder fund” without direct exposure to Bitcoin or crypto and that it may be the only option available to investors due to the strict crypto bans in India.
“This [Invesco CoinShares Global Blockchain ETF Fund of Fund] is nothing more than a feeder fund allowed to invest into an equity Irish-domiciled blockchain UCITS ETF, and there is no direct investment in crypto or Bitcoin…
Some investors may think there is a shortcut to investing in an equity blockchain fund where they have exposure to crypto. However, with the current hype and certain crypto bans in India, many may be forced to invest as this is the only choice available.”
India’s History With Crypto
After initially seeking to impose outright bans on cryptocurrency in the country, India has since distanced itself from that strategy.
Following El Salvador’s historic move to adopt Bitcoin as legal tender in June, India took a closer look at the cryptocurrency landscape and subsequently planned to reclassify Bitcoin as an asset class.
Back in October, The Indian government formally ditched the country’s plan to ban crypto altogether. The Finance Ministry of India began putting together a regulatory framework for the country.
India you are changing your mind more often than my ex #bitcoin https://t.co/LMnkdlPyyv
— Learn With Mike (@MikeStachurski) October 28, 2021
While India begins rolling out crypto exposure to its citizens, institutions in Australia have been taking strides towards pushing mainstream acceptance of crypto. At the end of October, Australia approved both an Ethereum and Bitcoin ETF in the country.
Shortly after the ETF approvals, the Commonwealth Bank of Australia, which holds more than $1 trillion in assets, announced its plan to dive into crypto by becoming the country’s “first main-street bank to offer a platform for retail customers to trade cryptocurrencies.”
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