Swiss crypto-asset ETP issuer 21Shares has cross-listed the 21Shares Short Bitcoin ETP on Deutsche Börse Xetra.
The ETP is the first globally to provide inverse exposure to the price movements of bitcoin.
The product, which debuted on SIX Swiss Exchange in January, was the first ETP globally to provide inverse exposure to the price movements of bitcoin, the world’s largest cryptocurrency by market cap.
Its debut on Xetra comes after BaFin, the German financial regulator, announced in March that it officially recognized cryptocurrencies as financial instruments.
The ETP was already available in Germany on Börse Stuttgart; however, the more prominent Xetra listing is likely to engender greater confidence in the product given the market’s perceived tighter regulatory controls.
The ETP is also centrally cleared on Xetra, further helping to promote trust in the product and potentially opening the door to institutional investors which are typically prevented from trading non-centrally-cleared instruments.
Clearing through a central counterparty (CCP) system, as opposed to bilateral settlement, reduces the counterparty risk that market participants are exposed to.
The ETP obtains its short exposure by borrowing bitcoin from industry-leading lending facilities and simultaneously selling it on an execution platform. At the end of the day, 21Shares buys the same quantity of bitcoin and returns it to the lender.
As such, the ETP provides 100% of the inverse daily return (before lending and management fees) of the price movement of bitcoin; however, over periods greater than one day, the return is not the same because the factor of minus one is reset on a daily basis.
21Shares advises, therefore, that the ETP is only intended for investors who plan to invest on a short-term basis and understand the risks of holding inverse and daily resetting products.
The ETP comes with a management fee of 2.50%. It is available to trade in euros on Xetra (21XS GY) and Börse Stuttgart (SBTCEUR GY) and in US dollars on SIX (SBTC SW).
Hany Rashwan, CEO at 21Shares, commented, “As noted earlier this year, 21Shares remains committed to introducing innovative products that offer exposure to cryptocurrencies via conventional and traditional ETPs while remaining a leading provider in the crypto asset issuance. Investors are now in a position to implement any bitcoin strategy in a safe, regulated, and conventional manner using a product that allows them to participate in the downwards movement of bitcoin.”
Laurent Kssis, Managing Director at 21Shares, added, “We have lobbied carefully but vigorously with the exchange to be in a position to launch the world’s first centrally cleared short bitcoin ETP on a regulated trading venue. The one missing trading product was to deliver a fully transparent financial instrument to capitalize on negative price movements within a complete regulated framework.”