While the world awaits the decision of the US Securities and Exchange Commission on the first Bitcoin ETF, Switzerland seems to have already taken the lead by allowing trading of the world’s first cryptocurrency-based exchange-traded product (ETP) on the SIX Swiss Exchange. Both retail and institutional investors will be able to avail the product from next week.
Backed by the Swiss startup Amun AG, the first global multi-crypto ETP will be listed under index HODL and will track five major cryptocurrencies: Bitcoin (BTC), Ripple (XRP), Ethereum (ETH), Bitcoin Cash (BCH), and Litecoin (LTC).
Hany Rashwan, Co-founder and Chief Executive of Amun, informed that the cryptocurrency ETP had been developed on the same stringent standards required of traditional ETPs. Speaking to the Financial Times, he remarked,
“The Amun ETP will give institutional investors that are restricted to investing only in securities or do not want to set up custody for digital assets exposure to cryptocurrencies. It will also provide access for retail investors that currently have no access to crypto exchanges due to local regulatory impediments.”
London-based Amun Technologies Ltd. together with Mv Index Solutions (Mvis) had launched the index in September. The ETP was subsequently launched by the Zug-based subsidiary arm of Amun Technologies Ltd—Amun AG. Mvis, on the other hand, is a subsidiary of Vaneck which previously had filed an application with the U.S. Securities and Exchange Commission to list and trade a bitcoin ETF.
As per the company website, Amun Crypto Basket Index tracks the performance of the top 5 crypto assets in terms of market capitalization and liquidity. It also effectively manages the volatility associated with less liquid/smaller crypto assets through its proprietary methodology and thereby provides diversified exposure to the crypto space.
The basket excludes cryptocurrencies that are tied to a fiat currency such as the tether or are designed to be anonymous such as monero and zcash. Additionally, cryptocurrencies which lack sufficient liquidity, trade on non-reputable exchanges, or have been traded for less than six months are also excluded.
Currently, the basket comprises 48.69 percent BTC, 25.72 percent XRP, 17.60 percent ETH, 5.11 percent BCH, and 2.88 percent LTC. As per the Financial Times, the ETP will carry an annual management fee of 2.5 percent.
Highlighting the burgeoning industry of ETPs, Thomas Zeeb, Head of Securities and Exchanges at SIX claimed that blockchain-based digital exchanges would entirely replace traditional ones in around ten years considering the cost-effectiveness, transparency and reliability of the blockchain technology as the prime reasons.
US regulators, on the other hand, seemed to have a contrary approach with the denial of nine applications to list and trade various BTC ETFs from three companies, including ProShares, Direxion, and GraniteShares.
Established in 1850, Six Swiss Exchange is Switzerland’s principal stock exchange. It offers outstanding liquidity in the trading of Swiss securities and connects companies from around the world with international investors and trading participants.