Institutional interest in cryptocurrency continues to grow, with investment firms rolling out new financial products to capture the demand. The latest development in this trend comes from Evolve Funds, a Canadian asset manager, which launched two leveraged cryptocurrency exchange-traded funds (ETFs) on the Toronto Stock Exchange (TSX).
Evolve’s Levered Bitcoin ETF (LBIT) and Levered Ether ETF (LETH) began trading Tuesday, offering investors 1.25 times exposure to Bitcoin and Ethereum, respectively. In a significant move, Gemini, the cryptocurrency exchange founded by Cameron and Tyler Winklevoss, will serve as the custodian for these funds.
Unlike traditional leveraged ETFs that rely on derivatives to amplify returns, Evolve’s funds utilize cash borrowing. This approach aims to optimize the cost of leverage, making the products more efficient for investors.
The ETFs are designed to provide a modest leverage ratio, catering to institutional and retail investors seeking enhanced exposure to digital assets.
Gemini highlighted its role in ensuring secure custody of these assets. “Investors can trade with confidence, as Gemini has received certifications for SOC 1 Type 2 and SOC 2 Type 2 security examinations by Deloitte,” the company stated in an announcement. The assets will be kept segregated on Gemini’s internal ledger for the benefit of fund owners.
Bridging Traditional Finance and Crypto
The launch of these ETFs marks an important step in expanding regulated investment opportunities in the cryptocurrency space. Evolve is positioning itself as an innovator in crypto-based financial products by offering leveraged exposure without derivatives.
Gemini’s involvement in the venture aligns with its broader strategic goals. The New York-based exchange has been working with financial giants such as Goldman Sachs and Citigroup on a potential public offering.
While no final decision has been announced, a public listing could further solidify Gemini’s standing in the financial sector.
Evolve’s new products arrive at a time when cryptocurrency markets remain volatile, yet institutional adoption continues to increase. The Winklevoss twins, who founded Gemini, have been vocal supporters of U.S. President Donald Trump during the election cycle.
His potential return to the White House is widely viewed as a positive signal for the crypto industry, which has faced regulatory hurdles under the current administration.
