Switzerland’s stock exchange, SIX Swiss Exchange will list the worlds first multi-crypto-based exchange-traded product (ETP). The Financial Times reports the news on Saturday, November 16th.
The Worlds First ETP
The Swiss startup Amun AG backs the first global multi-crypto ETP. The plan is to list the ETP under the index HODL. HODL will track the five major cryptocurrencies: Bitcoin (BTC), Ripple (XRP), Ethereum (ETH), Bitcoin Cash (BCH) and Litecoin (LTC).
According to Financial Times, each cryptocurrency will represent a certain market share within the upcoming ETP. Bitcoin will account for around 50 per cent with the rest divided among the other four. XRP will acquire approximately 25,4 per cent and Ethereum 16,7 per cent. However, Bitcoin Cash and Litecoin will only acquire 5,2 per cent and 3 per cent of the ETP.
The co-founder of Amun, Hany Rashwan, stated that the upcoming ETP is created in a way to follow the same strict rules and policies that are required by traditional ETFs. The new product will provide a regulated tool for trading cryptocurrencies for both institutional and retail investors.
According to Finews, Amun will list their ETP on the Swiss Exchange SIX. They have just hired Mark Rodino who is a veteran in business with passive investment products, such as ETPs. Rodino will have his work cut out as Amun plans to list the crypto index on the SIX exchange. The index is going to be managed by the German index unit of Van Eck. Amun has chosen the Swiss Exchange SIX since it is the 4th largest stock exchange in Europe with a market capitalisation of $1,6 trillion.
ETF or ETP?
Even though many thought the key to getting institutions onboard is through an ETF, an ETP might be an alternative as well. According to Investopedia, ETPs represent a type of security that is priced derivatively and trades intraday on a national securities exchange. Investment tools such as a commodity, a currency, a share price, or an interest rate are parts of an ETP. ETPs can reportedly be actively managed funds, including exchange-traded funds (ETFs), and others.
Sweden has already created an Exchange Traded Note (ETN). It is called Coinshares and has attracted around $1 billion since the listing on the Swedish exchange Nasdaq Stockholm in 2015.
However, during the upcoming months, institutions could get different options to enter the market. One alternative can be through the ETP, but Bakkt will launch during December and SEC will most likely approve an ETF during the first quarter of 2019.
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Dennis Sahlström has been trading and investing since 2012 and has for the last two years been consistently profitable. He has been in the crypto- and blockchain space since the middle of 2017 and realized its potential for our world, not least how it is transforming the society we live in. He has now created an education platform, together with the wealth coach Marcus the Maria. They teach regular people how to invest and trade in the cryptocurrency market with proven strategies. If you want to learn more and feel like its time to get into this new asset class, download our free book and register to the next live training to get your future in cryptocurrencies started.