Those following the cryptocurrency markets will by now likely know all about the upcoming Swiss exchange-traded product (ETP). Although this represents a notable step forward for the institutionalization of cryptocurrency, what does it mean for a potential ETF?
Europe’s fourth-largest exchange to begin trading crypto ETP
Some background might be necessary to preface this story. As Toshi Times covered yesterday, the SIX Swiss Exchange – Europe’s fourth-largest by volume – will begin trading a cryptocurrency ETP.
The ETP in question is called the ”Amun ETP” and is a ”multi-cryptocurrency” product consisting of multiple different cryptocurrencies. Specifically, it is made up of varying parts of Bitcoin, Ripple, Litecoin, Bitcoin Cash and Ethereum.
Investors will reportedly hold such a basket of cryptocurrencies that meet the investment firm’s criteria and various requirements. Fittingly, the Amun ETP will be trading under the ticker ”HODL”.
However, the cryptocurrency community has passionately anticipated another financial product during the better part of 2018: namely an ETF. This begs the question – could the Swiss ETP help set the stage for future ETF approval?
A crypto ETP is similar to a crypto ETF
Perhaps most importantly, an exchange-traded product is philosophically very similar to an exchange-traded fund. Both are financial vehicles that allow accredited traders and institutional investors a means to invest in digital assets – without needing custodians or becoming bogged down in murky regulatory waters.
According to Amun’s CEO, Hany Rashwan, ”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.”
Nevertheless, the truth is that the Swiss ETP might appear as more of an achievement than it actually is. Although it is still a significant – and undoubtedly positive – milestone for the cryptocurrency industry, it is not a first.
Not the first cryptocurrency ETP
The US market has already got access to an ETP, in the shape of Greyscale Investment’s Bitcoin Investment Trust. Furthermore, it is unlikely that a financial instrument in Switzerland will be the deciding factor in whether the US Securities and Exchange Commission decides to green-light cryptocurrency ETFs.
However, the Swiss ETP is nonetheless an important factor in making cryptocurrency-based financial products more accepted. The mere fact that Switzerland’s main exchange has allowed the creation of the Amun ETP could suggest that cryptocurrency is becoming increasingly accepted by institutions.
Although it is unlikely to be the deciding factor, the performance of this ETP could certainly influence future SEC decisions. As always, it remains to be seen exactly how this plays out – but the prospects are undoubtedly intriguing.
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Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.