Switzerland approves first cryptocurrency ETF
The world’s first exchange-traded product has been approved by the financial regulator -- not in the USA by SEC but in Switzerland by the Swiss financial regulator. The Amun Crypto ETP will start trading next week on the SIX exchange in Zurich and will be based on an index that tracks prices of five leading cryptocurrencies. Nearly half of its assets will be invested in Bitcoin, 25.4 percent in XRP, 16.7 percent in Ethereum, 5.2 percent Bitcoin Cash, and 3 percent in Litecoin. It will trade under the ticker "Hodl."
The ETP will allow investors to 'buy the market' rather than trade specific crypto assets. It will be among the company's first products after launching The Amun Crypto Basket Index which tracks five top cryptocurrencies. Chief Executive Officer at Amun AG Hany Rashwan said they intend to launch more products after the index basket ETP as well as expand to include "additional geographies and stock exchanges." The ETP will start trading on Six exchange in Zurich, which is a leading Swiss stock exchange for the trading of shares, bonds, investment funds, exchange-traded funds and exchange-traded
It will carry an annual management fee of 2.5 percent. Co-founder and chief executive of Amun Hany Rashwan told Financial Times news outlet that the ETP will provide an investment opportunity for investors who currently have no access to cryptocurrency exchanges due to restrictions by local regulations. It will also serve institutional investors who can only invest in securities or those who do now want to set up custody for digital assets exposure to cryptocurrencies. It could also encourage increased investments in cryptocurrencies.
Tow specialist market makers Jane Street and Flow Traders have provided seeding for the ETP and will also act as authorized participants. The team leading the ETP is a team of FinTech entrepreneurs and bankers who want to make buying of cryptocurrencies as easy as buying stock.
CoinShares and Greyscale are similar but offer single coins and of different legal structures.
ETFs are low-fees funds that provide a safer, more stable for investing because there is a custodian for the funds. A cryptocurrency ETF would track a basket of tokens and at the same time trade like common stocks on an exchange thus being subject to price changes throughout the day.
Cryptocurrency exchange-traded funds are yet to get an approval in the U.S.A because they could currently 'expose investors to “fraudulent and manipulative acts and practices” according to regulators, and although many hoped they could lead to price hikes when approved, that's a notion no longer held by the majority.
The Security Exchange Commission of USA has imposed its good share of "delays" to approve, effectively sucking up from the market, almost all expectations for a price hike that would ideally follow such an approval. Currently, the commission is considering the major ETF applications and approval time is not yet certain. And although there are many reasons that could be mentioned, SEC has actually been moving fast every time to "prevent" possibilities of huge abnormal price hikes/surges following major announcements or events in the space: Bakkt, ETFs, etc included, to the point that some people have felt that a crypto boom such as one witnessed in 2017 may not be feasible any time soon.