Is an ETF Bitcoin-Ethereum worth it? A recent analysis detailed an equally weighted portfolio for the two largest cryptocurrencies in the market in order to better understand their value proposition for investors.
In a significant move in the cryptocurrency market, the US Securities and Exchange Commission (SEC) has given the green light to a Bitcoin-Ethereum spot exchange-traded fund (ETF). Previously, the regulator had confirmed the receipt of the 19b-4 filing for the Hashdex Nasdaq Crypto Index US ETF. If approved by the SEC, estimated to be by March 2025, the product will include the two largest cryptocurrencies in the market, Bitcoin and Ethereum, in its portfolio.
Is an ETF Bitcoin-Ethereum worth it? An analysis shared by the Kaiko platform on July 5th was based on an evaluation of an equally weighted BTC and ETH portfolio during the 2021 bull run and this year’s record highs. According to the survey, the yield could have been 58% in 2024.
“Analyzing an equally weighted Bitcoin and Ethereum portfolio during the 2021 bull run and this year’s record highs in January, we find that it would have yielded 58% in 2024, compared to 20.6% in 2021,” highlighted the survey.
The analysis highlighted that traditional investors may be attracted to the ETF product that combines Bitcoin and Ethereum not only for the returns but also for the improved risk profile of a BTC/ETH portfolio.
“Using a 99% confidence interval for VaR, one of the most conservative levels used in traditional finance, we can see the daily profit and loss realized during the first-quarter bull run. The BTC/ETH portfolio maintains a manageable level of risk and a balance of gains and losses. Assuming a 99% VaR of $10,000, statistically, we would have $10,000 in losses 1 day out of 100, as seen below.”
The analysts explained that VaR is a risk indicator that assigns a dollar value to potential portfolio losses and their probability.
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