Pando Unveils Blockchain-Focused ETF with Minimum Risk Crypto Exposure
Just under a month after the collapse of cryptocurrency exchange FTX, Hong Kong-headquartered asset management firm Pando Finance has rolled out a blockchain-focused exchange-traded fund (ETF) on the city’s market to provide ordinary investors with “minimal risk” exposure to the sector.
Thursday saw the debut of Pando Finance’s two actively-administered ETFs with an emphasis on digital assets: one focused on blockchain and another one on technological advancement.
Both ETFs began trading earlier today at HK$8 (US$1.02), a 3% premium above their respective pre-launch indicated net asset values of HK$7.77.
Ren Junfei, CEO and director of Pando Finance, stated in an interview, “We aim to create a means for conventional investors and retail consumers to have exposure to and profit from the growth of the sector in the most convenient and risk-free manner possible.”
She stated that the two ETFs would enable investors to “make orders and engage this business in a convenient way” without needing to establish a cryptocurrency wallet in an attempt to possess crypto tokens.
“Investors may profit from the growth of this business via the breadth of their current financial offerings. They will be capable of placing orders on their current brokerage accounts without having to register accounts on Binance and perhaps other cryptocurrency exchanges.”
The introduction of the two ETFs immediately follows the demise of FTX, which ceased withdrawals in November due to a liquidity concern. The exchange filed for bankruptcy protection on November 11.
Gwenda Ho, a tax specialist at PwC Hong Kong, asserted in a release, “The effect of FTX’s insolvency will remain to have effect next year, with requests for more transparency.”
Paul Chan Mo-po, the Financial Secretary of Hong Kong, stated in a blog article that Hong Kong’s dedication to digital regulation is far more appealing presently, as the sector seeks increased accountability, after FTX’s collapse caused a dramatic decline in cryptocurrency prices and a cascade of issues across the sector.
Ren of Pando Finance stated that the demise of FTX will help the sector in the long run and contribute in the improvement of regulation. “The FTX [entire fiasco] may damage the trust of certain investors in this area and turn them more conservative with their next commitment in this sector, but in the longer – term, this will enable the sector as a whole to evolve in a healthy way,” she added.
A minimum of 70% of the net assets of Pando Finance’s blockchain-themed ETF will be invested in the equities of blockchain-focused fifirms, such as those engaged in ledger systems, decentralised databases, crypto mining, and other industries that will profit from the growth of this technology.
Likewise, a minimum of 70% of the net asset value of its innovation-focused ETF will be invested in the equity of firms engaged in innovative enterprises, including information technology, e-commerce, electric cars, artificial intelligence, the metaverse, and blockchain.
Both ETFs’ top 10 positions include San Francisco-headquartered bitcoin exchange Coinbase Global, Virginia-based business software company MicroStrategy, and American memory chip manufacturer Micron Technology.
“We have performed a great deal of thorough research while selecting equities and have been extremely attentive in selecting industries. “Unlike bitcoin tokens, these listed firms are subject to regulation and must routinely reveal their financial problems,” Ren explained.
“Investors will still have better and more accessible data to support their decisions, therefore the amount of risk will be significantly reduced.”