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The product called the “Amun Crypto ETP” will track the top 5 crypto assets in terms of market cap and liquidity. It will be available to both retail and institutional investors.
On Friday, the Financial Times reported that SIX Swiss Exchange, Switzerland’s major stock exchange based in Zurich, approved the listing of the world’s first multi-crypto-based exchange-traded product (ETP). The news outlet informed:
“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 “Amun Crypto ETP” is backed by Amun, a London-based financial technology firm. According to Hany Rashwan, the Chief Executive Officer (CEO) and co-founder of Amun, the crypto exchange-traded product was designed with a view “to meet the same strict standards required of conventional exchange-traded products widely used by investors.”
Listed under index HODL, the ETP will track five major cryptocurrencies: Bitcoin (BTC), XRP, Ethereum (ETH), Bitcoin Cash (BCH), and Litecoin (LTC). On its website, Amun states:
“Amun Crypto Basket Index tracks performance of the top 5 crypto assets in terms of market cap and liquidity, providing diversified exposure to the crypto space while using its proprietary methodology to effectively manage the volatility associated with less liquid/smaller crypto assets.”
50% of Amun’s ETP will be allocated in bitcoin, while XRP will make up a quarter (25.4%). Ethereum makes up one-sixth of the fund, with BCH and LTC consisting of the rest at 5.2% and 3% respectively.
Cryptos tied to fiat currencies, such as Tether, are not included. An annual management fee of the Amun ETP will make up 2.5%. As Hany Rashwan said, the Amun ETP will be available for both institutional and retail investors. He explained:
“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.”
The SIX Swiss Exchange believes that exchange-traded products are “secured bearer debt securities which don’t earn interest”, that is why “they are not subject to the Collective Investment Schemes Act (CISA). ETPs are not even supervised by FINMA.”
The trading will start this week.
The approval of a crypto ETP by the Swiss major stock exchange is a positive milestone for the industry, but not the first. An ETP already exists in the US market in the form of Grayscale Investment’s Bitcoin Investment Trust, and investors in the local market can purchase investment vehicles that represent the value of BTC.
But not all the businesses are ready to follow the example. Recently, BlackRock, the largest asset management firm in the world with approximately $6.4 trillion USD in assets, said that despite their belief in cryptos, they would not launch an exchange traded fund for digital coins until the industry grows up a bit and becomes ‘legitimate’.
About SIX Exchange
SIX Swiss exchange is the main exchange of Switzerland based in Zurich. SIX operates a competitive infrastructure for the Swiss financial center, catering to a broad, international client base. The company provides services relating to securities transactions, the provision of financial information and cashless payment transactions.
The SIX Swiss Exchange delivers fair and transparent trading in equities, bonds, sponsored funds, sponsored foreign shares, exchange-traded funds (ETFs) exchange-traded products (ETPs) and structured products. The exchange uses the trading platform X-stream INET and trades primarily in the Swiss franc (CHF).
SIX Swiss Exchange was the first stock exchange in the world to incorporate a fully automated trading, clearing and settlement system in 1995. The exchange is currently controlled by an association of 55 banks.
The exchange is known for its friendly attitude to cryptos. Recently, the exchange stated that its blockchain based platform would replace traditional analog-centric systems in the near future. The head of security and exchange at SIX Swiss Exchange, Thomas Zeed, said:
“The existing system could be completely replaced by the digital exchange in about ten years… The moment that brokers, banks, insurance companies, and big asset managers really see the cost advantages, they’ll move relatively quickly.”
SIX is planning to launch the so-called “SIX Digital Exchange (SDX)” in 2019, which will initially run alongside the classical SIX system.