Lead
Multi-asset cryptocurrency ETFs are poised to be the next phase of product development in the crypto fund market, according to Will Peck of WisdomTree. He argues that diversified crypto baskets can provide broader sector exposure while reducing the idiosyncratic risk of single-token funds, and expects a wave of launches as issuers seek a first-mover edge.
Key Developments
- Multi-asset crypto ETFs will likely be the next step for the industry.
- Diversified baskets can offer broad access to the sector and help mitigate single-asset risk.
- Issuers may accelerate launches to capture competitive advantages in the near term.
"We have talked about cryptocurrency as an asset class, but in reality it is a technology, and the fundamental drivers of returns for each of these tokens are in fact quite different, even though they tend to correlate simply because that's how the market is," said Will Peck.
Why It Matters
Investors have largely accessed digital assets through single-asset products. A move toward multi-token ETFs could:
- Reduce idiosyncratic risk tied to one token
- Improve portfolio diversification within crypto
- Provide simpler, broader exposure for retail and institutional investors
Market Context
While many crypto ETFs focus on individual assets, market participants increasingly recognize that tokens have distinct fundamentals—from smart-contract platforms to payments and infrastructure. Despite observed correlations, a basket approach can reflect the sector’s underlying variety of return drivers.
Potential structures could include:
- Market-cap-weighted crypto baskets
- Thematic baskets (e.g.,
smart contracts,DeFi,infrastructure) - Rules-based rebalancing for transparent index tracking
Looking Ahead
Peck expects a surge in combined fund launches in the near term as issuers race to secure early advantages. If adopted widely, multi-asset crypto ETFs could become a core building block for diversified digital-asset exposure in traditional portfolios.