Trading on the first bitcoin ETP is now possible on the SIX Swiss Exchange, Switzerland’s leading stock exchange. Amun Crypto, a UK fintech firm, is offering the financial product under the index HODL5.
The new index seeks to track the investment results of the top 5 cryptocurrencies ranked by market capitalization.
According to Investopedia, Exchange-traded products (ETP) are a type of security that is derivatively priced and trades intra-day on a national securities exchange.
ETPs are priced so the value is derived from other investment instruments, such as a commodity, a currency, a share price or an interest rate. ETPs can also be actively managed funds, including also exchange-traded funds (ETFs).
More than half of the index is represented by Bitcoin (50.73%) while the rest will consist in Ripple (31.20%), Ethereum (14.96%), and Litecoin (3.11%).
The product is tracking an index based on the four cryptocurrencies above. VanEck will manage the index while MVIS maintains it.
Bitcoin is currently trading around $4000, a level last seen around August 2017 as the cryptocurrency enjoyed an unprecedented surge that saw it hit $20,000 in December 2017.
Hany Rashwan of Amun Crypto says the product is meant for “investors that are restricted to investing only in securities or do not want to set up custody for digital assets exposure to cryptocurrencies.”
Rashwan says the product is structured to comply with the strict regulations that govern traditional exchange-traded products.
Additionally, it will give investors who do not have access to cryptocurrency exchanges to invest in digital assets, including people who are barred from dealing with cryptocurrencies due to regulatory restrictions.
The ETP will trade under the ticker $HODL with seeding being provided by Jane Traders and Flow Traders.
While bitcoin ETFs have generated excitement in the past, their introduction has not helped push up prices as some pundits had expected. To the contrary, they have been blamed for helping drive down bitcoin values by giving an opportunity for institutional investors to short.
Switzerland is an important crypto hub in Europe hosting many cryptocurrency and blockchain startups due to its friendly regulations.