Switzerland’s SIX Swiss Exchange has given the go ahead to list the world’s first exchange traded product tracking a basket of cryptocurrencies.
The Amun Crypto Basket ETP (HODL) tracks an index comprised of five leading cryptocurrencies, including about a 50% exposure to bitcoin, along with 25% ripple, 17% ethereum, 5% bitcoin cash and 3% litecoin, the Financial Times reports.
Hany Rashwan, co-founder and chief executive of Amun, said the cryptocurrency ETP is structured to meet the standards required of any other conventional ETP traded on the market.
“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,” Rashwan said.
Jane Street and Flow Traders, two specialist market makers, will act as authorized participants in the creation and redemption process of the crypto ETP and have provided seed money for the new exchange traded product.
The ETP’s ticker, HODL, is an acronym for “hold on for dear life,” a common exclamation in response to the wide oscillations in the nascent crypto market. For example, bitcoin, the most popularly traded cryptocurrency on the digital markets, reached a high of $20,000 last year and has slipped to under $5,000 Monday, its lowest level in 13 months.
Traders said selling on Monday was largely attributed to sentiment, citing fears that Thursday’s “hard fork” in bitcoin cash, where the smaller coin split into two separate currencies, could destabilize related cryptocurrencies, Reuters reports.
Cryptocurrency-related ETPs have largely been stuck on the tarmac as many regulators have warned of the risks involved with the nascent digital currency, compared to traditional financial assets. U.S. regulators have already rejected multiple applications to launch a crypto-related ETP on concerns that the vehicle could expose investors “fraudulent and manipulative acts and practices.”