Amun launches inverse Bitcoin ETP on SIX

Jan 27th, 2020 | By | Category: Alternatives / Multi-Asset

Amun, a Switzerland-based issuer of exchange-traded products linked to crypto-assets, has announced the launch of the 21Shares Short Bitcoin ETP (SBTC SW) on SIX Swiss Exchange.

Hany Rashwan, CEO of Amun

Hany Rashwan, CEO of Amun.

The ETP is the first globally to provide inverse exposure to the price movements of Bitcoin, the world’s largest cryptocurrency by market cap.

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, Amun 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.

Amun therefore advises 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.

Hany Rashwan, CEO of Amun, commented, “We have worked hard to be in a position to launch the first inverse Bitcoin ETP on a regulated trading venue here in Switzerland. Amun offers an existing suite of long investment products for a variety of crypto assets; however, the one missing puzzle was to deliver a product to capitalize on negative price movements.

“Our platform is now near complete and marks an important step towards the introduction of derivative products in conventional ETP form for the still-nascent crypto market. I am proud that the Amun team continues to pioneer innovation and bring new investor-friendly institutional-grade products to the market.”

The ETP has the potential to be well-received given the high level of volatility in Bitcoin. The cryptocurrency moves by around 2% each day, on average, but is known to swing in excess of 5% regularly. Last year, Bitcoin’s largest price move in a single day was greater than 15% when it slumped from $13,880 to $11,200 on 26 June.

Coupled with Amun’s long Bitcoin product – the Amun Bitcoin Crypto Single Tracker ETP (ABTC SW) – investors now have a complete set of tools to express their views on the prominent cryptocurrency.

The ETP comes with a hefty price tag however, charging a management fee of 2.50% which does not include the cost of borrowing the underlying Bitcoin.

The ETP is the first product to be launched under Amun’s new ETP platform – 21Shares. Amun’s remaining line-up of ten crypto-asset ETPs will be migrated over to the new brand during Q2 2020.

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