Latest Crypto Breaking News: WisdomTree’s cryptocurrency baskets have been rebalanced and provide investors with exposure to the new digital asset Cosmos.2022 was an incredibly difficult year for investors and asset classes in general, including cryptocurrencies. Whether it was the macroeconomic environment, in which central banks began to aggressively raise interest rates to combat accelerating inflation, or bad news related to cryptocurrencies (such as FTX), the setbacks were not without their impact to this new asset class.
2023, at least so far, presents a different picture. The full range of risky assets has performed positively as inflation concerns have started to ease around the world.
Central banks may have reached or are about to reach their “peak on hawkish strategy”, offering some optimism about the future of longer-duration assets. Furthermore, cryptocurrencies have been boosted by the tide of improving investor confidence and have had a good start to the year.
With the performance of various cryptocurrencies and digital assets in positive territory, it is a good opportunity to remind investors that the digital asset space is bigger than Bitcoin. While cryptocurrency is an important part of the ecosystem, recent years have seen growth in exposure to other crypto assets, so the ecosystem looks very different than it did just a year ago, and no one knows what it will look like. next year.
Long-term winners in cryptocurrencies may not emerge in the nascent state of the ecosystem, or perhaps they will. That’s why we’ve created a suite of exposures, ranging from a single cryptocurrency to a basket of cryptocurrencies, to offer investors diversification while allowing them to hedge their bets on tomorrow’s winners.
Our cryptocurrency baskets are designed to provide exposure to an evolving cryptocurrency landscape, and within the indices methodologies of these exchange-traded products (ETPs), we incorporate quarterly rebalancing that allows new currencies to be added to the underlying indices.
To this end, a new digital asset Cosmos (ATOM) was added to the WisdomTree Crypto Market (BLOC) and WisdomTree Crypto Altcoins (WALT) ETPs as part of our most recent rebalancing, which took place on Friday, February 17, 2023.
WisdomTree Crypto Market (BLOC)
BLOC is a free float market capitalization-weighted ETP that provides exposure to a diversified basket of crypto assets. This product is designed for those looking for broad exposure to the liquid and established part of the cryptocurrency market. Due to the relatively large market capitalization of BTC and ETH, the combined weighting of these crypto assets in the ETP is capped at 75%, while the individual components are capped at a maximum weighting of 45% and a minimum allocation of 2.5%. by cryptoactive.
Below is the updated composition of the BLOC index.
WisdomTree Crypto Altcoins (WALT)
WALT is a free float market capitalization-weighted ETP that provides exposure to a diversified basket of crypto assets. The ETP provides exposure to all major coins, excluding BTC and ETH, and was designed for investors who already have exposure to these mega-cap coins and want to diversify their exposure without changing their existing positions. The maximum weighting of individual components is 50%, while the minimum allocation is 2.5% per crypto asset.
Below is the updated composition of the WALT index.
What is Cosmos?
Cosmos is a Layer 1 network consisting of a blockchain network with the ability to be optimized for particular use cases. The main advantage of such a structure is interoperability, a buzzword in the world of cryptocurrencies to make the exchange of information between various blockchains as efficient and secure as possible. At a high level, Cosmos can be considered a competitor to Polkadot (DOT) and Avalanche (AVAX), as they each employ a “multi-chain” structure, but with their own twist of technical implementations (for example, consensus algorithms). ).
As for Cosmos users and its point on the adoption curve, it is still relatively early, as are many layer 1s that have yet to reach critical mass, such as Bitcoin and Ethereum. Looking at a few metrics, Cosmos is a magnitude lower in terms of wallets, transactions, and US dollar equivalent transfer volume, but it is growing. With approximately one million wallets growing at a rate of 2% per month and over $100 million in daily transactions, there is demonstrable demand for block space on the network.
The addition of Cosmos to WALT and BLOC adds further diversification within the underlying ETP index and continues to represent broad market exposure in a thoughtful and robust manner. If markets continue to favor riskier assets in the coming year, the digital asset space could offer a longer play into a growth allocation with the characteristic of a historically asymmetric risk-reward profile.
WisdomTree launched its first crypto asset ETP, WisdomTree Bitcoin (BTCW) in 2019 and has since built a dedicated digital asset team and expanded its product range to include single currency ETPs offering exposure to
Ethereum, Cardano, Solana, and Polkadot, while also creating a range of diversified baskets of cryptocurrencies.
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