Largest Swiss Exchange to List World’s First Crypto ETP Under HODL Index
Switzerland’s major stock exchange SIX Swiss Exchange will list the world’s first crypto-based exchange-traded product (ETP) next week, the Financial Times reported Saturday, November 16.
The product, dubbed the “Amun Crypto ETP,” is backed by Amun, a London-based financial technology firm, and will be listed under index HODL. It will track five major cryptocurrencies: Bitcoin (BTC), Ripple (XRP), Ethereum (ETH), Bitcoin Cash (BCHABC), and Litecoin (LTC).
According to Investopedia, ETPs represent a type of security that is priced derivatively and trades intraday on a national securities exchange, based on investment tools such as commodity, a currency, a share price, or an interest rate. ETPs can reportedly be actively managed funds, including exchange-traded funds (ETFs), and others.
Speaking the new product which was recently approved by Swiss regulators, Amun CEO, Hany Rashwan, expressed confidence that the new ETP will open the door to mainstream crypto involvement.
“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,” he said.
According to the report, each cryptocurrency will acquire a certain market share within the upcoming ETP, with Bitcoin accounting for almost half of the ETP’s assets. The rest are set to be divided in fractions, with 29 percent in XRP, and 16.39 percent in Ethereum, while Bitcoin Cash and Litecoin will acquire 5.2 and 3 percent of the market, respectively.
HODL ETF’s components. Source: ft.com
The Amun ETP index will be managed by the German branch of investment management firm Van Eck. While Amun AG is based in the Swiss “Crypto Valley” town of Zug, it is reportedly a branch of Amun Technologies, a UK-based fintech company.
Additionally, Jane Street and Flow Traders, two market makers, have revealed that they have provided the seed funding for the ETP.
According to Amun’s website, SIX Swiss Exchange is the fourth largest stock exchange in Europe with a market capitalization of $1.6 trillion.
Earlier this week, Thomas Zeeb, head of securities and exchanges at SIX told Reuters that blockchain-based digital exchanges will entirely replace conventional ones in “about ten years,” citing a large interest in cost advantages of the technology by brokers, banks, and insurance firms.
“The moment that brokers, banks, insurance companies and big asset managers really see the cost advantages [of blockchain], they’ll move relatively quickly,” he said.
While some members of the industry have kept a close eye on when the U.S SEC will approve a Bitcoin ETF, it is unsurprising that such a derivative product has been rolled out in a country with regulatory clarity around cryptocurrencies. As mentioned in the report, Switzerland was chosen as the right destination for Amun’s index fund after the startup considered over “23 countries.”
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