Inside money, markets, and big tech

Switzerland sets precedent with world’s first cryptocurrency ETP

Let the ETFs roll in


We told you cryptocurrency-based exchange traded funds (ETFs) were coming.

Switzerland’s leading stock exchange has given the go-ahead for the world’s first cryptocurrency ETP, the Financial Times reports.

The ETP is called the “Amun Crypto exchange traded product (ETP)” and will be trading from next week on the “Six” exchange in Zurich.

The Amun Crypto ETP will track an index made up of five leading cryptocurrencies including: Bitcoin, XRP, Ethereum, Bitcoin Cash, and Litecoin.

Each of these coins will be weighted at 49.7 percent, 25.4 percent, 16.7 percent, 5.2 percent, and 3 percent, respectively. The fund holds a 2.5 percent annual management fee.

There is no mention of how the fund plans to address the recent Bitcoin Cash hard fork. But that’s what the management fee is for; to pay professionals to make that decision on behalf of investors.

Perhaps the best thing about this ETP is that its trading ticker is simply “HODL.” A not-so-subtle nod to cryptocurrency investors around the world.

While there are similar products on the market, from a legal point of view they are not true ETFs as they track only single coins rather than a curated fund, or are based around derivatives.

Indeed, Goldman Sachs launched a Bitcoin derivative earlier this year, based around a futures contract, and has been signing up selected investors.

Switzerland’s launch of a true cryptocurrency-based ETF undeniably sets a precedent. It could mark the start of more cryptocurrency ETFs making it to market.

Published November 19, 2018 — 10:44 UTC