Switzerland’s top stock exchange, the Six Swiss Exchange (SIX), will launch an exchange-listed crypto fund on Thursday. In doing so, SIX becomes the first stock exchange to offer an ETF-like Bitcoin product.
Congratulations to @hany, @AmunAG and the country of #Switzerland for listing the first multi-asset #ETP!!! We are proud of you and thank you for choosing @MVISIndices to provide a regulated and financial-standard index backing #HODL. Index press release: https://t.co/CqZiUrVQG4 pic.twitter.com/wHO47ABjA4
— Gabor Gurbacs (@gaborgurbacs) November 18, 2018
Amun AG, the startup responsible for the Exchange Traded Product (ETP), will also integrate blockchain technology into some of the backend processes. Interestingly, the Swiss exchange requires ETPs to be backed 100% by the underlying asset.
Amun AG CEO Hany Rashwan said:
The product is a Swiss ETP not an ETF. It isn’t based on futures. When an investor purchases, a corresponding amount of actual crypto assets is purchased then stored with a qualified custodian.
Listed under the ticker HODL5, the ETP will track 5 digital assets: Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Bitcoin Cash (BCH) and Litecoin (LTC). The fund practically functions just like a stock, meaning those interested could make a purchase as they would with any typical stock.
Amun, which is located in the “crypto valley” that is Zug, Switzerland, plans to offer a greater range of crypto products across a wider geography in the future.
According to Rashwan:
We plan on releasing more products across more geographies and look forward to working with local regulators everywhere we’re welcome. But love having Switzerland as our base. We want to make investing in crypto as easy as buying a stock across multiple products and geographies, working with local regulators.
Crypto Going Mainstream?
The development will bring some relief to investors, who have had to sit through a rough month for the market, after Bitcoin lost roughly $14 billion in a few days and fell below the symbolic $6,000 mark.
Calls for an ETF approval have grown louder this year, and multiple proposals have been offered, especially in the US.
It is seen as one investment vehicle that could really broaden the market by luring the wider public to cryptocurrency. ETFs or ETPs would give investors the opportunity to dabble in cryptocurrency investment without having to take physical possession of digital assets, which bypasses the technical acumen that is associated with holding cryptocurrencies.
A simplified and more accessible approach is an important criteria in the battle for mass adoption, and ETPs such as Amun AG’s is a step in the right direction.
Rashwan concurred with the sentiment:
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.