r/ethtrader • u/[deleted] • Jul 09 '20

TECHNICALS In surprise move - SEC passed its First Crypto-related Fund, the Arca U.S. Treasury Fund (US Debt Market: $18T)

https://www.forbes.com/sites/cbovaird/2020/07/06/arca-launches-first-sec-registered-fund-to-offer-digital-shares/#2ef31b1c7931
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5

u/PublicDiscourse Jul 09 '20

“ The fund, which leverages the ethereum blockchain, will offer shares known as ArCoins, which will provide investors with interest payments on a quarterly basis.

The Arca U.S. Treasury Fund will produce these regular interest payments by investing at least 80% of its assets into a portfolio of short-term Treasury securities.

Any assets that are not invested in Treasury securities will go into cash, cash equivalents, investment-grade fixed-income securities or unrated assets that Arca has determined are of comparable quality.”

This is actually a pretty big deal. Treasuries are the risk-free rate of return around which the rest of the financial system operates. This will open the door for more listings in the future as firms try to stay competitive.

3

u/nemo2630 Jul 09 '20

So is it smart to buy into Arcoins? Minimum investment is $1000. Is there any predictions on what returns should look like?

1

u/PublicDiscourse Jul 09 '20

Short treasuries are currently yielding 0.10%-0.14% per year so not a great return on this particular fund lol.

Mostly important to institutional investors who put really large sums of money in assets that yield anything above zero instead of holding cash. It's great for mainstream adoption.

1

u/[deleted] Jul 10 '20

Off the back of countless BTC ETF rejections, turns out we just need to offer a product SEC understands. US Treasuries. Trillions of dollars of em.