So finally it has happened – world’s first crypto exchange-traded fund (aka crypto ETF) is now going live, though with a slightly different terminology. And it has not gone live in the United States (SEC is still adamant on its position). Instead, this wonder has happened in Switzerland – the nation where a lot of firsts in finance took place!
That’s right. The Swiss market regulators have approved Amun Crypto Exchange Traded Product (ETP), which will be the first crypto ETF in the world after it goes live on SIX exchange later this week. The usage of term ETP instead of ETF is bound to cause some confusion and curiosity in the minds, but basically, this is the same thing as an ETF. Its underlying assets include Bitcoin, Ethereum, XRP, Bitcoin Cash and Litecoin, with first 3 assets being the dominant in terms of weightage.
Given below is what Amun Crypto ETP looks like:
- Bitcoin 49.7%
- XRP 25.4%
- Ethereum 16.7%
- Bitcoin Cash 5.2%
- Litecoin 3%.
As you can see, BTC, ETH and XRP collectively contribute to almost 92% of this ETP’s weightage. The weightage of BCH and LTC is minuscule by comparison. Roger Ver is certainly not going to be happy right now!
The ETP will have an annual management fee of 2.5%, and it’s an easy new way for investors to have some exposure to cryptocurrencies without holding them directly. Hany Rashwan, the CEO and Co-Founder of Amun AG, the startup behind this ETP, said:
“The product opens the door for institutional investors who are limited to investing only in securities or those who will not want to establish custody for the exposure of digital assets to cryptocurrencies. It will also provide access to retail investors who currently do not have access to trade cryptos due to local regulatory impediments.”
Switzerland might’ve approved the first crypto ETF, but it doesn’t mean that they didn’t conduct any due diligence on the product before approving it. According to Rashwan Amun AG has been waiting for approval of their crypto ETP for several months now. The preliminary approval came back in September, and it’s only now (two months later) that the product is going to be live on SIX. No regulator takes investor protection lightly.
It will be interesting to see now whether SEC learns a thing or two from its Swiss counterparts or not. Right now it’s sitting on a pile of under-review crypto ETF applications.