The world of cryptocurrency investment continues to evolve, and one of the most compelling developments in recent years is the rise of crypto basket ETFs. These financial products offer investors a diversified exposure to digital assets without having to pick individual winners. Among the latest entrants is the 21Shares Crypto Mid-Market Index ETP (ALTS)—a promising new fund targeting mid-cap cryptocurrencies.
This innovative product reflects a growing trend: investors seeking broader market exposure rather than betting on single altcoins. As the crypto ecosystem matures, tools like index-based ETFs are becoming essential for risk management and portfolio diversification.
What Is the 21Shares Crypto Mid-Market Index ETP?
The 21Shares Crypto Mid-Market Index ETP (ALTS) is designed to track the performance of the Vinter 21Shares Crypto Mid-Cap Index. Unlike traditional crypto funds that focus on Bitcoin or Ethereum, ALTS excludes these two giants and instead targets the next tier of digital assets—the mid-cap cryptos.
The index includes eight major altcoins:
- Binance Coin (BNB)
- Solana (SOL)
- Cardano (ADA)
- XRP (Ripple)
- Polkadot (DOT)
- Litecoin (LTC)
- Polygon (MATIC)
- Bitcoin Cash (BCH)
This broad basket approach sets ALTS apart from competitors like the WisdomTree Crypto Altcoins ETF (WALT), which tracks only five coins. While WALT launched with a lower management fee of 1.49%, ALTS offers greater diversification, making it an attractive option for investors who want comprehensive altcoin exposure.
👉 Discover how diversified crypto portfolios can reduce risk and boost long-term returns.
Why Diversification Matters in Crypto
Cryptocurrencies are known for their extreme volatility. While this can lead to outsized gains, it also increases the risk of significant losses—especially when investing in individual altcoins. That’s where crypto basket ETFs come in.
By spreading investments across multiple assets, these funds help mitigate the impact of any single coin’s poor performance. For example, if one project faces regulatory scrutiny or technical setbacks, the overall fund isn’t derailed.
Diversification also aligns with proven investment principles seen in traditional markets. Just as investors use index funds to gain exposure to the S&P 500 instead of picking individual stocks, crypto investors can now apply the same logic to digital assets.
Yet, despite the clear benefits, many crypto investors still prefer speculative bets over indexed strategies. Why?
The Psychology Behind Crypto Speculation
There are several possible explanations:
- Speculation Culture: The crypto community often celebrates high-risk, high-reward plays. Stories of early adopters turning small investments into life-changing sums fuel a gambling-like mindset.
- Perceived Volatility Advantage: Even diversified crypto portfolios remain highly volatile compared to traditional assets. Some investors may feel that since all cryptos are volatile anyway, they might as well go all-in on their favorites.
- Market Immaturity: Unlike equities, there's limited data on whether active crypto trading outperforms passive indexing. There’s no equivalent to SPIVA (S&P Persistence & Index Versus Active) reports for crypto—so investors lack evidence-based guidance.
As a result, many continue to rely on intuition rather than strategy.
How ALTS Compares to Other Altcoin ETFs
While both ALTS and WALT serve similar purposes—providing exposure to non-Bitcoin, non-Ethereum cryptos—they differ significantly in structure and composition.
| WALT Allocation | ALTS Allocation |
|---|---|
| Solana: 44% | Binance Coin: 31% |
| Cardano: 27% | Solana: 17% |
| Polkadot: 14% | Cardano: 16% |
| Litecoin: 10% | XRP: 14% |
| Bitcoin Cash: 5% | Polkadot: 10% |
| Litecoin: 4% | |
| Polygon: 3% | |
| Bitcoin Cash: 3% |
Notice that WALT is heavily weighted toward Solana, giving it a more concentrated risk profile. In contrast, ALTS spreads its allocation more evenly, reducing dependency on any single asset.
Additionally, ALTS charges a higher expense ratio of 2.5%, compared to WALT’s 1.49%. This premium may reflect the added complexity of managing a larger basket and ongoing index licensing costs.
Still, for investors prioritizing diversification over cost, ALTS presents a compelling case.
👉 Explore how index-based crypto strategies can outperform speculative trading over time.
The Growing Role of Crypto Index Funds
21Shares already manages the largest crypto basket ETF in Europe—the 21Shares Crypto Basket Index ETP (HODL)—with over $194 million in assets under management. HODL includes Bitcoin, Ethereum, and other major cryptos, serving as a one-stop solution for broad market exposure.
The launch of ALTS signals a shift toward more specialized index products. Instead of offering just "crypto" or "Bitcoin," providers are now segmenting the market by capitalization, use case, and risk profile.
This segmentation allows investors to fine-tune their portfolios:
- Use HODL for core crypto exposure
- Add ALTS for targeted altcoin diversification
- Avoid overlap with existing holdings
Such modular investing mirrors trends in traditional finance, where institutional and retail investors build portfolios using multiple ETFs tailored to specific goals.
Frequently Asked Questions (FAQ)
Q: What is a crypto basket ETF?
A: A crypto basket ETF is an exchange-traded product that tracks a group of cryptocurrencies. Instead of buying each coin individually, investors buy shares in the fund, gaining instant diversification.
Q: How does ALTS differ from Bitcoin ETFs?
A: While Bitcoin ETFs focus solely on BTC, ALTS excludes both Bitcoin and Ethereum and targets mid-cap altcoins—offering exposure to emerging digital assets with higher growth potential but also increased risk.
Q: Can I buy ALTS outside Europe?
A: Currently, availability depends on local regulations and broker offerings. Many UK and EU-based investors can access it through licensed platforms, but US availability may be limited due to stricter SEC rules.
Q: Why is the fee higher for ALTS compared to other ETFs?
A: The 2.5% fee reflects operational complexity, including custody, rebalancing, and index licensing. However, investors should weigh fees against benefits like diversification and professional management.
Q: Are crypto index funds safer than buying individual coins?
A: They are generally less risky due to diversification, but they don’t eliminate market-wide volatility. A crypto index can still lose value during broad sell-offs.
Q: Is there evidence that index funds outperform active crypto trading?
A: Not yet conclusively. The market lacks long-term studies comparable to equity market analyses. However, historical patterns in traditional finance suggest passive indexing tends to win over time.
👉 Learn how global investors are using diversified crypto strategies to navigate market cycles.
Final Thoughts
The launch of the 21Shares Crypto Mid-Market Index ETP (ALTS) marks a significant step forward in the institutionalization of cryptocurrency investing. It offers a disciplined, rules-based way to gain exposure to promising altcoins—without the emotional rollercoaster of picking winners.
While speculative trading will always have its appeal, smart investors are increasingly turning to diversified crypto baskets, index funds, and passive strategies to build sustainable wealth in this volatile asset class.
As the market evolves and more data becomes available, we may see a shift toward evidence-based investing in crypto—just as we did in stocks decades ago.
For now, products like ALTS provide a bridge between speculation and sophistication—one that could redefine how we think about digital asset portfolios.