According to Yahoo Finance, London-based fintech startup DLT Financial (recently rebranded from Tramonex) has announced plans to launch a fund that will track an index of the top ten cryptocurrencies on the market — with Bitcoin naturally being one of the core holdings. The move is designed to provide traditional investors a straightforward pathway into the cryptocurrency space.
Background of DLT Financial
DLT Financial, which was originally known as Tramonex, aims to position virtual currencies as an attractive asset class for investors. In April, Tramonex secured a £250,000 ($333,000 USD) grant from the UK government. Now, the company is developing a working prototype of a proposed digital currency index that will track ten different cryptocurrencies including Bitcoin, Ether, and Ripple.
Co-founder and CTO Dave Askey stated: “We’re really looking to bridge the gap between the existing blockchain world of tech and the more traditional institutional investment community.” He explained that currently it is difficult to invest in these products without deep technical knowledge of managing and buying cryptocurrencies. DLT Financial aims to bring these opportunities to the wider community.
Details of the Index Fund
Index funds are widely popular in traditional stock markets (e.g., the Dow Jones or S&P 500), but they remain rare in the cryptocurrency world. In September 2015, the cryptocurrency exchange Poloniex created Coinoindex, a similar product that allowed investments in the top 20 altcoins. However, that service has since become defunct, leaving a void that DLT Financial intends to fill.
The DLT Financial index fund will provide investors with a diversified exposure to the top cryptocurrencies, reducing the risk associated with holding a single coin while capturing the overall growth of the digital asset market. Askey emphasized that the company is committed to using the best security practices available to safeguard customer funds.
Security Measures
In the wake of the Bitfinex hack, where a Hong Kong-based Bitcoin exchange lost over $60 million in customer funds, investor concerns about cryptocurrency security have intensified. DLT Financial says their solution is deep cold storage — investors will not have to bear the risk of hacks or cryptocurrency loss, as all investments will be kept offline and stored on cold storage devices. This approach is expected to reassure institutional investors who demand institutional-grade security.
Market Implications
The launch of such an index fund could mark an important step toward mainstream adoption of cryptocurrencies. As cryptocurrency-based trusts, ETFs, and index products gain traction, they could entice traditional investors to trade, hedge, invest, and speculate in these emerging technologies. DLT Financial’s effort, if successful, may accelerate the integration of digital assets into traditional portfolio allocation models.
While the fund is still in its prototype stage and specific launch dates or fees have not been disclosed, the industry is closely watching this development. An institutional-grade cryptocurrency index would provide a new gateway for institutional money to enter the space, potentially boosting liquidity and market maturity.