Crypto fund manager Amun AG has listed a new inverse bitcoin exchange-traded product (ETP) on Switzerland’s primary stock exchange SIX.
An inverse ETP allows to earn a positive return when an underlying asset (in this case - bitcoin) falls, as it allows shorting. Amun’s inverse ETP, dubbed “21Shares Short Bitcoin ETP (SBTC)," allows investors to short bitcoin (BTC), Hany Rashwan, co-founder and CEO of Amun, told The Block.
Say for example, if a trader buys $100 of SBTC, a short position of $100 is opened. Assuming that bitcoin's price goes down by 10%, then the SBTC ETP would have a positive return of 10% (minus the costs). SBTC charges an annual management fee of 2.5%.
By shorting, SBTC allows traders to “capitalize on negative price movements,” said Rashwan. Compared to shorting via crypto derivatives, SBTC does not require borrowed capital.
Amun said SBTC is reset at the end of each day and the performance is not rolled over to the next day, and therefore, it is “ideally suited to capture short term price movements of bitcoin for a short recommended period.”
11 Crypto ETPs
With SBTC’s addition, Amun now has a total of 11 crypto ETPs listed on stock exchanges. These ETPs are tied to bitcoin, ether (ETH) and XRP digital assets, among others.
Rashwan told The Block that all the other 10 ETPs are long products, while SBTC is the first short product. “We are starting with a simple inverse product, but more product types and strategies are coming,” he said.
Such inverse ETPs and exchange-traded funds (ETFs) already exist for traditional assets such as stocks and bonds. For crypto, Rashwan said, SBTC is “the world’s first.”
Amun now manages a total of over $55 million in client assets, Rashwan told The Block, adding that the most popular ETPs are HODL, bitcoin ETP and Binance coin (BNB) ETP.
Effective today, Amun is also rebranding all its ETPs under the name 21Shares. “We wanted to differentiate traditional financial ETPs from our crypto native products,” said Rashwan, adding that 21 refers to bitcoin’s fixed supply of 21 million coins.
Looking ahead, Amun plans to list its ETPs on at least two European exchanges by end of 2020, said Rashwan. Last month, Amun received a regulatory nod from the Swedish Financial Supervisory Authority to expand its offerings in the European Union.
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