Why do we need Crypto ETF Index?

7 min readOct 4, 2021


Overview: The change of crypto market leads to the rise of ETF

According to data from CoinMarketCap, there are 12,190 kinds of tokens in the crypto market, approximately 50 times more than the fiat currencies all around the world.

However there was only Bitcoin in 2009 and several tokens in the crypto market in 2013, after the hot red of ETH and IDO in 2016, the tokens in the crypto market exploded from hundreds to thousands.

What we can see is along with the development of the crypto market, there will be new tokens coming out once the scenario refers to the financial field. So what can we invest in the crypto market?

Let’s move our eyes to the traditional financial securities market.

The traditional financial market generally refers to any market for the securities transactions, including stock markets, bond markets, fund markets, foreign exchange markets and derivative markets etc., index fund is the key infrastructure among them.

In fact index investment doesn’t need the investors to know the asset very well, anyone can deploy their asset on index products such as ETFs or common funds, in order to gain more profits from various portfolios. Indeed it’s a “HODL”.

Through investing in an ETF fund and buying the single fund, you can conveniently invest the whole market and track the stock of popular companies, finally enjoy the development dividends of qualified companies and the wealth of change of economic development. What’s more, an ETF doesn’t need to be managed, the investment cost is low, which is suitable for the ordinary investors.

According to Statista, there were only 7,602 ETFs with a scale of $7.74 trillion, accounting as ⅓ of global stock trading volume all around the world in 2020. Due August 31, 2021, SPDR S&P 500 ETF Trust is the world’s most valuable ETF with a market value of approximately $3966.66 billion.

If you compare the traditional financial market with the crypto market, you can see that various Tokens such as BTC, ETH, ADA are similar to stocks. With the explosion of encrypted Tokens, the crypto market has entered into a new stage, where however there are still no ETFs.

With the explosion of the number of encrypted Tokens and the development of the industry, the crypto market is becoming more and more mature and professional, new challenges and confusions have been raised for ordinary investors’ speculative operations. At that time, the market for crypto ETFs was born.

The crypto market is complicated, maybe it’s their first time to really manage their own assets by managing encrypted portfolios. However the characteristics of the crypto market decides its threshold is high, investors not only need to choose potential and valuable targets, but also need to know the use of wallets, cross exchanges, smart contract screening, handling gas fees etc.all complicated processes.

For ordinary investors, less is more, the simpler the better. They can have the chance to invest in crypto market without being proficient in operations, which made the encrypted index one of the most attractive investment opportunities in DeFi.

What is encrypted Index?

Although cryptocurrency and digital assets are relatively new asset classes compared to traditional securities markets, the financial market is gradually becoming interested in and investing in crypto assets. The industry recognizes the need for crypto portfolio management products and solutions. The review of ETF funds submitted by the SEC by numerous agencies in the United States also highlights the coming of this trend.

Encrypted Index is similar to traditional ETF funds. By providing an asset to support a basket of Token portfolios, the risk is spread to different cryptocurrency investment portfolios. This is particularly attractive to traditional investors, who are usually discouraged from the relatively high-risk cryptocurrency market. Crypto Index, an index product, is extremely attractive.

At the same time, from a long-term perspective, on the basis of risk adjustment, the performance of encrypted index funds is often better than direct investment in various Tokens in the encrypted market.

MatrixETF is the next generation of decentralized ETF platform that supports cross-chain. MatrixETF’s DeFi Index Product (MDI) provides investors with an exposure to top DeFi investment and an automated portfolio based on decentralized governance. By holding MDI, it is possible to track the development and trend of DeFi in the entire encryption market, and the diversified asset allocation method achieves a greater degree of risk diversification and better returns.

Advantages of investing in crypto ETFs

Compared with buying tokens directly in the encrypted market, investing in encrypted ETF funds has obvious advantages:

User convenience:

For most ordinary users, due to time constraints, you may not have time to continuously monitor the performance of your invested tokens. Encrypted ETF funds do not need to invest too much time. Only through the simplified allocation of assets, they can realize the investment exposure of an asset to a class of assets (industry, probability) without missing the potential high returns of the cryptocurrency market.

Low volatility and long-term:

The crypto market is a 24-hour uninterrupted market, in which the Token fluctuation risk is abnormal, and it is easily affected by various positive and negative news, policies, funds, and behaviors, which can cause the price of the currency to skyrocket and plummet. High volatility is a good thing for professional investors, but for ordinary investors, it is easy for ordinary investors to lose their assets due to unbalanced mentality and inadequate strategies during violent fluctuations.

Encrypted ETF funds are a combination of a basket of Tokens, which reflect their comprehensive performance. Therefore, their price fluctuations are their average value and are passive. They will not cause large fluctuations due to a sharp drop in the price of one of the Tokens. Lower volatility can help reduce risks and maintain long-term and stable investment. This is also the category of family investment.

Diversified income and low cost:

There are many DeFi products in the encryption market, and various business logics (Dex/Lend/Staking) require different tokens, and the handling fees are high. For ordinary users, there are higher thresholds and fees for participation. In the form of ETF funds, users purchase ETF funds, and the platform gathers users’ funds to participate in various DeFi businesses, such as mining, staking, etc. The huge volume means extremely low handling fees, and at the same time, generous income and In return, these will be returned to users who hold ETF funds.

Crypto market ETF outlook

Since the second half of 2020, various DeFi protocol products have been gradually launched, and DeFi TVL has gradually increased. The overall scale of the DeFi market is expanding. The expansion of the scale has attracted more users to participate, but at the same time, it has also put forward new ideas for the market. Requirements.

Encrypted ETF funds, which are user-friendly, easy to manage, long-term asset allocation and diversified portfolios, are an indispensable product form in the DeFi explosion. Participating in various DeFi ecosystems through ETF funds can not only accumulate more value and assets for ETF funds, but also prosper the entire DeFi ecosystem and long-term development.

For users, it is difficult to participate in all DeFi. Therefore, investing in ETF funds for the DeFi market. Holding ETF funds can gain exposure to the growth and income of the DeFi industry. This is a very convenient investment strategy and method. , And a low-cost way to enter DeFi.

According to Statista data, in 2020, the global ETF management asset scale is 7.74 trillion US dollars, and the trading volume accounts for one-third of the global stock trading volume. From this figure, the growth potential of ETFs can be seen.

For the crypto market, the overall size of the crypto market reached 2.16 trillion U.S. dollars, and DeFi TVL reached 87.12 billion U.S. dollars.

The scale of crypto ETF funds is less than US$500 million, which is 0.5% of DeFi TVL and only 0.02% of the global cryptocurrency market value. We are in the early stages of the crypto ETF market, and the crypto ETF market will show an index in the next few years. Level of growth.

The right time for Crypto ETF Indexes is now.

MatrixETF is the next generation of decentralized ETF platform that supports cross-chain. We are about to launch Index of popular concepts in the crypto market, including:

  1. DeFI Fund: Track the trends and development opportunities of the encrypted DeFi market.
  2. Public Chain Index Fund: MCI, which tracks the ecological development of the public chain of the cryptocurrency market.
  3. Solana Ecological ETF Fund: MSI, tracking popular and potential projects in the Solana public chain ecosystem.
  4. Stable Coin Fund: Balance the fluctuation and value of various stable coins and earn income.
  5. NFT Fund: Tracking Crypto GameFi and the market’s hot and potential NFT.

Around the end of Sep or the beginning of October, MatrixETF will officially launch ETFs on Solana and Ethereum mainnets.

Stay tuned with us!

About MatrixETF

MatrixETF is the next generation of decentralized ETF platform to run the cross chain,which goal is to establish a decentralized, automated, personalized and diversified portfolio for users, as well as help users easily enjoy long-term, stable and efficient financial services.

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