21Shares unveils risk-controlled bitcoin & ethereum ETPs

Jul 20th, 2022 | By | Category: Alternatives / Multi-Asset

Digital assets specialist 21Shares has unveiled two new crypto ETPs in Europe providing directly backed exposure to bitcoin and ether while managing volatility.

21Shares unveils risk-controlled bitcoin & ethereum ETPs

Bitcoin and ether have exhibited annualized volatilities of 92.2% and 121.8%, respectively, over the past five years.

The 21Shares S&P Risk Controlled Bitcoin Index ETP (SPBTC SW) and 21Shares S&P Risk Controlled Ethereum Index ETP (SPETH SW) have been listed on SIX Swiss Exchange with expense ratios of 2.50% each.

The ETPs are linked to the S&P Bitcoin Dynamic Rebalancing Risk Control 40% Index and S&P Ethereum Dynamic Rebalancing Risk Control 40% Index which target annualized volatility of 40% through dynamically allocating between their namesake cryptocurrency and US dollars.

The ETPs are 100% collateralized with actual bitcoin or ether holdings that are stored using institutional-grade custody solutions provided by Coinbase and Copper.

The indices rebalance to their 40% volatility targets on a monthly basis or the day after volatility exceeds the target by 10%.

The ETPs are designed for investors seeking a smoother ride compared to the traditional high volatility associated with crypto assets – as of the end of June 2022, bitcoin and ether had five-year annualized volatilities of 92.2% and 121.8%, respectively.

Arthur Krause, Director of ETP Product at 21Shares, said: “Data from our research team shows that adding bitcoin or ether exposure to a traditional investment portfolio can significantly enhance overall risk-adjusted performance. These newest ETPs based on S&P Dow Jones Indices’ world-class indices allow investors to realize the benefits of these innovative crypto exposures while controlling for volatility.”

Sharon Liebowitz, Senior Director, Innovation at S&P Dow Jones Indices, added: “Over the last two years, S&P Dow Jones Indices have been developing cryptocurrency indexing capabilities to help promote more transparency and facilitate access to this emerging technology-driven asset class. Our innovative indices aim to help measure and address volatility associated with the underlying cryptocurrencies.”

The two new listings are the latest products within 21Shares’ ‘Crypto Winter’ suite, a set of ETPs designed to help investors weather the ongoing bear market in digital assets. They follow the launch earlier this month of the 21Shares Bitcoin Core ETP (CBTC SW), the world’s lowest-cost directly backed bitcoin ETP which has an expense ratio of just 0.21%.

According to 21Shares, in addition to low-cost and risk-controlled long crypto exposures, the firm also plans to introduce bear-market-oriented products for shorter-term tactical allocations.

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