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Here Is A New Token-Based ETF From Another Cryptocurrency Exchange

OKEx

A Chinese-based Crypto-to-Crypto trading platform known as OKEx has launched a traded fund for Cryptocurrency exchange. OKEx had been launched earlier by OKCoin, which is arguably one of the leading Cryptocurrency exchanges operating in China.

All About This New Product

Referred to as OK06 Exchange-Traded Tracker {OK06ETT}, this new service from OKEx comes with a host of Cryptocurrency assets, with shares that consumers would be able to trade with wholly to diversify risks and reduce the costs of transactions.

According to information that the company gave, the Exchange-Traded Tracker will, first of all, replicate the operations of six virtual currencies that are currently traded on its main platform. The six digital coins are traded against the USDT -Tether Cryptocurrency, which is the US dollar-pegged currency.

They include Ethereum (ETH), Bitcoin (BTC), Bitcoin Cash (BCH). Litecoin (LTC), EOS, as well as the platform’s native utility token, referred to as OKB. OKEx has gone ahead to explain that the tokens must be listed among the leading 10% based on their thirty-day average trading volume against the US dollar-pegged tether. This is the only way they would be able to qualify for the indexing. A representative of this company added that by default, OKB is a constituent token of the OK06ETT.

Investors on this platform would also be able to redeem the ETF for the underlying assets. This is one of the best ways of blocking the price of its share from diverging further from the net asset value of the fund.

For either the underlying asset or the USDT, redemption will cost the traders a fee of 0.2%.

Similar Product in the Market?

Barely four days before this great announcement, Asia-based Huobi, which is the major competitor for OKEx, also dropped a similar virtual currency-based Exchange Traded Fund known as Huobi Pro. The Huobi’s new product that was launched on Friday, 1st June 2018 replicates the operations of ten major virtual coins in the market on its platform. This is done based on both their market liquidity and valuation.

This product has been referred to as the first virtual coin Exchange Traded Fund, but now they would have to share the tag with OKEx’s new product.

List of Prohibited Users

One notable fact is that the two service providers; Huobi and OKEx have both opened their Cryptocurrency trading portfolios to those who want to invest in China.

However, they have both applied strict restrictions to block away consumers and traders from the United States and its territories. These new services also blocks trading from investors from other places such as Hong Kong. This is despite the fact that Hong Kong is the current base for OKEx. That can, however, be linked to the Cryptocurrency ban that was laid by China in 2017.

Up to the time this article was done, all the market regulators in Hong Kong had not taken a public stance on the whole matter. This would have been a different case if it were brought before the United States watchdogs, which, up to this moment, haven’t granted the Crypto Exchange Traded Funds a given light.

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