Cryptocurrency Exchange Huobi Launches Exchange Traded Fund HB10

Singapore-based cryptocurrency trading platform Huobi has launched a new exchange-traded-fund (ETF) backed by digital currencies. The crypto-backed ETF works similarly to traditional funds, wherein investors can buy a small stake of the fund while getting exposure to a portfolio of multiple different digital currencies.

The ETF is called as HB10 based on the exchange’s recently launched benchmark index called Huobi 10 Index. The fund is now open to subscriptions and accepts purchases only through digital currencies instead of fiat currencies. Huobi has identified five digital tokens -Bitcoin, Ether, USDT, and its native Huobi token - using which the exchange can subscribe to the fund.

Huobi said that the fund has received an overwhelming response after the launch. Soon after launching the fund on Friday, more than 10 million subscribed to it in a span of just 30 minutes.

Huobi said that the ETF will replicate the Huobi 10 Index that tracks 10 different digital assets, based on their liquidity and market capitalization, on the Huobi Pro exchange in real-time. The Index makes use of weighted samples to track the overall performance of the crypto market on the Huobi Pro.

Thus by tracking this data, the HB10 fund will help small and retail investors to diversify their risks while allowing them to invest across multiple digital currencies. In addition to retail investors, the HB10 ETF will also be available for institutional investors which according to the company could potentially "reduce the impact of institutional entry and exit" on single digital currency.

In its announcement, the exchange wrote: “Being first to market, HB10 offers interchangeability with other digital assets hosted by Huobi Pro. HB10 will help users attain exposure to the digital assets market with a relatively small capital outlay and also provide users with greater diversification across constituent coin trading pairs. Overall, the tracker product will help users who are interested in blockchain technology to trade the broad digital assets market.”

There are also other players in the crypto industry who have tried to launch the Bitcoin ETFs in the market previously. In addition to this crypto-based ETF, Huobi has also launched an investment fund dedicated to blockchain startups in China and South Korea.

In order to launch this fund, Huobi has teamed up with Chinese investment firm NewMargin Capital and South Korean securities firm Kiwoom Securities. Two major banks from South Korea including the Industrial Bank of Korea and Korean Development Bank have participated by investing in these funds as limited partners.