While all eyes are still glued to the Securities and Exchange Commission in the United States to give a verdict on the first Bitcoin ETF, the Swiss regulators have just raced ahead. According to the latest updates coming from Switzerland, the main stock exchange has given a green light to the world’s first exchange-traded product tracking multiple cryptocurrencies.
Swiss take the lead in the Bitcoin ETF/ETP race
As the BTC prices hit the lowest point for the year, Swiss regulators took the opportunity to bring some cheer to the market as they announced the world’s first cryptocurrency-based exchange-traded product. The Amun Crypto ETP, which will start trading next week on the SIX exchange in Zurich, has been designed to track an index based on the movements of five leading cryptocurrencies.
The ETP has been set up in a way where just under half of the ETP’s assets will be invested in bitcoin with the remainder divided between XRP (25.4 per cent), Ethereum (16.7 per cent), bitcoin cash (5.2 per cent) and Litecoin (3 per cent). The ETP will carry an annual management fee of 2.5 per cent.
Hany Rashwan, co-founder and chief executive of Amun, a London financial technology company, said the cryptocurrency ETP had been constructed to meet the same strict standards required of conventional exchange-traded products widely used by investors.
He was quoted speaking to Financial Times where he said
“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,”
There are two rival providers, CoinShares and Greyscale, already offer digital currency investment vehicles, but these are different legal structures and linked to single coins making Amun Crypto ETP the first in this category. Jane Street and Flow Traders, two specialist market makers, have provided seeding for the Amun ETP and agreed to act as authorized participants.
The ETP will trade under the ticker Hodl, a nod to a favourite exhortation adopted by cryptocurrency investors — “hold on for dear life” — in response to the wild volatility that has roiled the market.
While Swiss have given a go ahead, US regulators have rejected multiple applications to launch cryptocurrency exchange-traded funds because of concerns that such vehicles could expose investors to “fraudulent and manipulative acts and practices”.
Now all eyes will be on the institutions on how do they use this product to make their investments in cryptos. An inflow of capital here may propel other regulators also to consider regulation for similar products.
Will this acceptance by the Swiss regulators change the stance of the US SEC as well? DO let us know your views on the same.
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Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Follow him on Twitter at @KoinKing1 or connect with me on linkedin.