Cryptex Finance sponsors the Cryptex Digital Market Cap ETF (BAGZ), an exchange-traded product providing diversified exposure to digital assets. The Fund tracks the Cryptex Digital Market Cap Index, which includes major and emerging cryptocurrencies such as Bitcoin and Ethereum. Cryptex maintains both the Fund and the underlying index. The index includes a mandatory 6.5% weight floor for the Cryptex governance token, CTX. While the index contains 36 assets, the Fund holds a subset of 19 eligible components to meet regulatory requirements. Cryptex generates revenue through a 0.90% annual sponsor fee and retains 75% of rewards from staking up to 33% of proof-of-stake assets such as Ethereum and Cardano. The Fund is a Cayman Islands C corporation listed on Nasdaq, allowing investors to trade shares through brokerage accounts instead of managing private keys or institutional custody. Authorized participants create and redeem shares in blocks of 10,000 to keep the market price aligned with the NAV. The Fund uses BitGo for all trading and custody. This structure subjects U.S. investors to tax implications related to passive foreign investment companies.
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