Exchange-Traded Funds or ETFs came to financial markets in the late 1990s, eliminating the relationship between retail investors and hours of stock research. ETFs help investors gain exposure to multiple commodities or equities all in one. ETFs were originally proposed to allow investors to access passive or index funds. Today this has expanded, as we now see actively managed ETFs for various sectors and themes in the market. Investment vehicles provide investors with extremely low cost diversification and does not require them to have a ton of knowledge about commodities, equities, or the crypto assets (in our case, in the ETF to gain exposure). Many notable exchange-traded funds include SPDR’s “SPY”, Vanguard’s “VOO”, and many more that track the different indices in the market. This developed into commodities with iShares coming out with “GLD”. Today, we have many different types of ETFs that are both actively and passively managed.
The growth of ETFs is only second to the growth of smartphones since 2009. ETFs were a sign of maturity in the US equities market, and in crypto they are a sign of maturity as well. Although it took nearly 90 years for the equity markets to develop these funds, crypto cycles move faster and throughout these past 10 years we have seen this market mature in existential ways. Many novice investors in crypto have trouble buying multiple tokens due to the complex nature of crypto but they still want to learn while gaining exposure. This undoubtedly shows the need for decentralized investment vehicles. A decentralized ETF can be a game changer to many investors and make a great number of people’s lives much easier. The convenience of an ETF is absolutely unmatched due to its diversified nature. Investors should not have to jump through hoops to gain exposure to certain crypto assets. Therefore we, at HAI, believe it is time to make that a reality.