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CRYP, the new BetaShares Crypto Innovators ETF, like ProShares Bitcoin Strategy ETF (NYSE: BITO) in the US, will not directly put investors money into cryptocurrencies.

Instead, it will aim to track the Bitwise Crypto Industry Innovators 30 Index before fees and expenses.

The CRYP index is designed to capture the full breadth of the crypto ecosystem by providing exposure to pure play crypto companies, those whose balance sheets are held at least 75% in crypto assets, and diversified companies with crypto focused business lines, states the BetaShares website.

According to Bitwise, the top 3 holdings in the index as of October 28 were:

  • Galaxy Digital Holdings Ltd (TSE: GLXY): 12.95%
  • Coinbase Global Inc (NASDAQ: COIN): 11.15%
  • MicroStrategy Incorporated (NASDAQ: MSTR): 9.79%

Listed early Nov 2021 with CRYP units priced at $10 a unit. Trading , purchases, took it to above $12 within a few days, but it has been downhill for the last three weeks. Now around $9.92, and below that initial entry price.

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  • 5 months later...

CRYP was $12 last Nov and is now $2.94.

Shares in Nasdaq listed Coinbase Global, which operates a cryptocurrency exchange, have tumbled more than 70 per cent this year alone and have shed four fifths of their value since reaching a peak in November.

Hut 8 Mining is another pure play cryptocurrency company that has declined sharply. The business specialises in the practice of mining bitcoin and ethereum, earning small sums by facilitating transactions on the blockchain. Shares in the Canadian group have tumbled by two-thirds this year and are down 82 per cent from a peak in November.

Canaan, a Nasdaq listed, China based company that manufactures hardware used in cryptocurrency mining, has also tumbled in the past year. The company shares rocketed sharply during the first year of the pandemic but have since lost 90 per cent of their value from a peak in March 2021.

Cryptocurrencies themselves have declined sharply in 2022, underscoring the pressure facing the sector, which is known for high levels of volatility and prices that can swing wildly on shifting risk appetite.

Bitcoin, the largest cryptocurrency by market value, has fallen by a third since the year began to the lowest level since December 2020. The decline marks a halving in value from a record high in November that has wiped more than half a trillion US dollars in market value. The fall has occurred during a perilous time for global markets, denting the hopes of its proponents who have long argued the currency can function as a defensive store of value akin to gold, attracting investors in times of uncertainty.

Ethereum, the second largest cryptocurrency after bitcoin, has fallen by a third this year and is down 49 per cent from the peak in November. The currency is currently at its lowest level since July last year.

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and if a so called stablecoin can crash, what hope for the rest??

A celebrated experiment that combined math and software to get a digital currency to behave like a dollar is crashing in dramatic fashion, posing the biggest test yet to decentralised finance and the will of its backers to defend it.

TerraUSD, or UST, is an algorithmic stablecoin, meaning it uses a complex combination of code, trader incentives, smart contracts and no small amount of faith to maintain its peg of one to one to the dollar. It does this by working with a crypto token in the same ecosystem, Luna, which can be swapped for UST and vice versa by traders to keep the price of UST where it should be.

Stablecoins are designed to keep their value at $US1. But this week the third largest stablecoin, TerraUSD, fell as low as US69¢, after a series of sudden and large withdrawals.

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