Amun AG has been approved by Switzerland’s markets regulator to start offering Crypto-ETF services on the SIX Swiss Stock Exchange platform. The ETF will be offered as an index comprising of BTC, XRP, BCH, ETH, and, LTC.
The ETF Concept?
An exchange-traded fund or an ETF is a collection of investment portfolios for tailor-made for individual and institutional investments clients that a company holder on their behalf. These clients can buy a share of assets in the investment portfolios. The fundamental consideration for any investor is to track the performance of each asset and to trade on the best performer. Summarily, an ETF is a pot of company/broker-managed pot of investments for trading with clients.
In the same note, a Cryptocurrency ETF allows a company to offer Digital Asset portfolios for clients to buy in a mainstream Stock market. The benefit of the transactions is that buyers do not actually own Cryptocurrencies but only get rights to the portfolios, there are therefore free of security risks. Additionally, a Cryptocurrency ETF is a strategy of shorting Digital Assets meaning that it is a way of easily participating in Crypto markets without having to go through the long procedures of Crypto exchanges and mainstream payment networks.
Meanwhile, it is important to note that Cryptocurrency ETF investors get a chance to earn interests or losses depending on the performance of the particular digital asset.
The ETF Features The Most Liquid Leading Cryptos
The approved Amun AG Cryptocurrency ETF will be focusing on the most liquid and leading Cryptocurrencies- Bitcoin (BTC), Litecoin (LTC), Ripple (XRP), Bitcoin Cash (BCH) and Bitcoin (BTC). The firm has termed the five as HODL5; the new portfolio investment that will be available from Monday 19th November 2018.
The criteria that were used to select the five Coins are as follows; The Cryptos have to be more than 6 months old, they must be traded at reputable Crypto exchange platforms, and they should be leaders in market capitalization. The standards, therefore, eliminate some Digital Assets such as Monero and Stablecoins such as USDT.
HODL 5 comprises of BTC at 48%, XRP at 30% and the rest Coins share the remainder. Amun AG will hence be buying Cryptocurrencies with money from the bets and allowing a custodian such as BitGo, etc. to secure these Digital Assets.
SIX Swiss Exchange Is A Global Leader And The ETF Will Impact Crypto Markets
The Zurich based SIX Swiss Exchange that will be offering the Crypto ETF is the biggest in Switzerland and the fourth in Europe. It commands a trading volume of over $1.6 trillion yearly at a profit of over $100 billion as at Q1 2018.
Hany Rashwan, the CEO of Amun AG, welcomes the approval stating that institutions and retail investors will now be able to invest in Cryptocurrencies as securities. Last week, Christine Lagarde advices Central Banks to unveil Cryptocurrencies to spur innovation in Crypto markets from private investors. With the Crypto ETF approval, the battle lines have already been drawn!
Meanwhile, the million-dollar question is whether the US SEC will borrow a lead from their Swiss counterparts and grant pending BTC ETF requests.