MVIS digital asset strategist Martin Leinweber has said digital asset sectors captured in crypto multi-asset exchange-traded products (ETPs) may be the only way to gain direct exposure to future industries such as the metaverse, decentralised finance (DeFi) and web3.
Speaking to ETF Stream, Leinweber (pictured) said many people access these themes via equities simply because they cannot buy the tokens relating to the same subsector.
“Investing in those equities does not have to be bad,” he said. “There could be a great returns potential investing in those names as well – I would not exclude that – but do not expect equities and crypto assets to perform equally.
“The coins and tokens are the pure-play to play the metaverse or DeFi. The equity exposure is a very indirect play,” Leinweber continued.
“Yes, there are companies providing the hardware and software for the metaverse but if you talk about Web3 as the internet of ownership – which implies you need a blockchain – the purest play you can do is via the token and not via the equity. The same is true in the case of the metaverse.”
A key difference is while an equity exposure means the control of internet applications remains with companies and their shareholders, holding tokens supports the decentralised spirit of sectors such as Web3 and DeFi.
Also, whereas companies might have other operations outside of the future theme being targeted, tokens will play roles in the metaverse and other areas as the tools used for transactions and as proof of ownership of virtual assets.
Leinweber, who spoke at ETF Stream's Crypto 2025 event earlier this month, said sectorisation into areas such as smart contracts, media and entertainment, DeFi and infrastructure applications is the next step for crypto baskets.
However, he suggested a “prudent” approach to using crypto sectors might be as satellite holdings alongside a core investment in something like a market-cap-weighted top ten crypto index.
“If you have this toolkit, you can have a market-cap-weighted core and play narratives by overweighting smart contracts or metaverse sectors according to your market assessment,” Leinweber said.
Another step that will complement sector baskets will be multi-asset ETPs that generate yield for investors via staking. The issue with this, Leinweber said, is to date there has been a lack of reliable data to create multi-asset staked indices. This is something MVIS are considering but are at “an early stage”, Leinweber noted.
Speaking on why multi-asset crypto ETPs have yet to be rolled out widely, he concluded: “It goes back to the investor base. If investors only know bitcoin, it may be handy for robo-advisers and banks offering savings plans to just offer products catering to that.
“Additionally, the majority of exchange-traded products (ETP) available in Europe are single-token. Only a few are baskets. We are early days but it will develop.”
To watch the on-demand sessions of Crypto 2025, click here.