Huobi Announces Crypto-Based ETF HB10

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Huobi Announces Crypto-Based ETF HB10

While traders in the United States continue to await regulatory approval for the cryptocurrency-based exchange traded fund (ETF), other markets around the world are taking the lead in launching the popular product, which provides the dual benefits of stock-like real-time trading and mutual-fund-like diversification. (See also: SEC Considers Changing Rules to Allow Bitcoin ETFs.)

Huobi, a Singapore-based cryptocurrency trading platform, has announced the development of a new cryptocurrency-based ETF that will provide investors with a straightforward way to get exposure to a basket of several cryptocurrencies via a single investment.

Meet HB10

The ETF is named HB10, and it is now accepting subscribers. However, any purchases of ETF units must be done using cryptocurrencies such as bitcoin (BTC), ethereum (ETH), tether (USDT), and Huobi token (HT).Fiat currency investments are not permitted.

The exchange charges a tiered trading fee that decreases to $0 dependent on the amount invested. Investments up to 500,000 USDT incur a 0.10% cost, those between 500,000 and 1 million incur a 0.05% fee, and those between 1 million and 10 million incur no fee.

Underlying Huobi 10 Index

The ETF, dubbed the “weather vane of digital assets,” will be based on the Huobi 10 Index and will seek to duplicate its performance. The Huobi Group created the index late last month, and it includes the ten biggest cryptocurrency components in terms of market capitalization and liquidity on the Huobi Pro platform.

The index will include all mentioned cryptocurrencies that are traded against USDT on Huobi Pro. Any blockchain-based asset that fits into one of four categories—coin, platform, application, or real asset token—can be included in the index. Coin refers to digital currencies such as bitcoin that are used as a transaction medium; platform refers to the framework and assets on the blockchain platform such as ethereum that support a variety of usages; applications are tokens linked to blockchain functions, features, and artifacts; and real asset tokens, such as tether, are those that are linked with real-world assets such as gold or US dollars. (See also: Is Stablecoin the Solution to All Cryptocurrency Issues?)

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The HB10 ETF will also make it easier for institutional and ordinary investors to participate in a diverse basket of cryptocurrencies. While the bitcoin ETF will be accessible to worldwide investors, including those in China, it is now unavailable to consumers in the United States due to the country’s regulatory deadlock over cryptocurrency-related ETFs.

Investing in cryptocurrencies and Initial Coin Offerings (“ICOs”) is very dangerous and speculative, and neither Investopedia nor the author suggest that you do so. Because every person’s circumstance is different, a knowledgeable specialist should always be contacted before making any financial choices. Investopedia makes no guarantees or warranties about the accuracy or timeliness of the information provided on this site. The author owns no cryptocurrencies as of the day this post was published.

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