Gemini, the cryptocurrency exchange founded by the Winklevoss twins, will act as the custodian for Evolve’s newly introduced leveraged Bitcoin and Ether ETFs, designed to enhance returns through cash borrowing.
The Winklevoss-led exchange is set to manage assets for Canadian asset manager Evolve Funds’ recently launched leveraged Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds, known as LBIT and LETH, which commenced trading on the Toronto Stock Exchange this past Tuesday. Evolve describes these products as offering “modestly leveraged” access for retail investors.
In a recent announcement, Gemini revealed that the ETFs aim to deliver 1.25 times exposure to BTC and ETH by utilizing cash borrowing instead of derivative instruments to boost returns. Unlike traditional leveraged ETFs that often rely on derivatives, these funds “will leverage cash borrowing to enhance returns while optimizing the associated costs,” according to statements from Evolve ETFs.
“These are Canada’s first modestly leveraged crypto ETF offerings for retail investors, showcasing the innovative spirit that characterizes the rapidly evolving digital assets sector.”
Evolve ETFs
Gemini highlighted that its custody services feature “SOC 1 Type 2 and SOC 2 Type 2 security assessments conducted by Deloitte,” noting that assets will be “segregated on our internal ledger for the benefit of the fund participants.”
This partnership unfolds as the New York-based crypto exchange, supported by twins Cameron and Tyler Winklevoss, explores a potential public offering in collaboration with Goldman Sachs and Citigroup, which may happen as early as this year, though no definitive announcement has been made yet.
Earlier reports indicated that the Winklevoss twins have been openly supportive of former President Donald Trump during the electoral period, with his potential return to the White House seen as favorable for the cryptocurrency sector.