According to Eric Balchunas, Simplify has filed for a Private Credit strategy ETF that will allocate 80% of assets to Business Development Companies (BDCs) and Closed-End Funds (CEFs), with the remaining 20% used for credit derivatives hedging via total return swaps (source: Eric Balchunas, Twitter). This balanced exposure offers traders an accessible vehicle to tap institutional-grade private credit yields while managing risk through sophisticated derivatives, which could attract both yield-seeking investors and crypto market participants aiming for diversification. The ETF structure may increase liquidity and transparency in private credit, potentially influencing correlated DeFi lending protocols and tokenized credit products.

According to Eric Balchunas, BondBloxx is utilizing the '33 Act trust structure for its private credit ETF, with the fund's documentation indicating an 80% allocation to private credit and a 20% allocation to public assets for liquidity purposes.