Gemini Custodian for Evolve's Leveraged Bitcoin, Ether ETFs
Gemini, a leading cryptocurrency exchange, has been selected as the custodian for Evolve Funds' newly introduced leveraged Bitcoin and Ether ETFs, LBIT and LETH. These ETFs have commenced trading on the Toronto Stock Exchange, representing a notable achievement for the Canadian asset manager. This initiative aims to offer retail investors a regulated avenue to gain leveraged exposure to prominent cryptocurrencies.
Gemini's appointment as custodian highlights its strong custody services and dedication to regulatory adherence. The exchange will protect the assets for Evolve’s leveraged ETFs, ensuring that investor assets are securely held as these new products enter the market. This collaboration underscores Gemini's increasing prominence in the cryptocurrency sector and its capability to deliver secure and compliant custody solutions.
The leveraged ETFs, LBIT for Bitcoin and LETH for Ether, provide 1.25x exposure through cash borrowing instead of derivatives. This method is designed to optimize the cost of leverage for the funds while offering a more straightforward and transparent structure. Unlike traditional leveraged ETFs that often rely on derivatives, Evolve’s new products use cash borrowing to amplify returns. This strategy aims to balance potential gains with risk management, making the products attractive to those wary of excessive volatility.
Evolve's "modestly leveraged" exposure is intended to offer retail investors a controlled level of leverage, allowing them to benefit from amplified returns while managing risk. The ETFs began trading on Tuesday, and market observers will evaluate whether the cash borrowing model can deliver consistent returns and mitigate risk compared to derivative-based alternatives. Gemini’s involvement as a custodian further enhances investor confidence in these products, as it ensures that the assets are held securely and in compliance with regulatory standards.
This development coincides with Gemini's ongoing expansion of its services and support for digital assets. The exchange has recently announced that it has expanded USD payment support in the UK and EU, further cementing its position as a leading player in the global cryptocurrency market. With its robust custody services and commitment to regulatory compliance, Gemini is well-positioned to support the growth of leveraged crypto ETFs and other innovative financial products in the digital asset space.
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