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21Shares launches two new Bitcoin (BTC) and Ether (ETH) products

 


With cryptocurrency markets down more than 50 percent this year, 21Shares is working to replicate the benchmarks of the S&P Dow Jones indices with its new risk-adjusted crypto investment products.


Swiss crypto investment firm 21Shares has launched two new exchange-traded products (ETPs) that allow investors to invest in the largest cryptocurrencies, namely bitcoin ( BTC ) and ether ( ETH ). At the same time, the company wants to reduce volatility by adjusting its assets to the US dollar.


The new products called 21Shares S&P Risk Controlled Bitcoin Index ETP and 21Shares S&P Risk Controlled Ethereum Index ETP will be offered on the SIX Swiss Exchange from July 20th. The ETPs will trade under the tickers SPBTC and SPETH, the company announced on Wednesday.


Both ETPs target 40% volatility, which is achieved by dynamically rebalancing or increasing asset allocation in USD as volatility rises. These products are designed to replicate the benchmarks of the S&P indices and control risk by adjusting exposure to the underlying index and dynamically reallocating into US dollars.


Arthur Krause, head of the ETP department at 21Shares, emphasized that the 40 percent refers solely to volatility and not to the development of the investment. In a statement, Krause said that large-cap stocks in the United States have an annual volatility of 20 percent. This figure is 70 percent for bitcoin and 80 percent for ether.


"The 21Shares S&P Risk Controlled Index ETPs combine exposure to a volatile cryptocurrency with cash that exhibits no volatility to achieve moderate volatility overall."

Sharon Liebowitz, senior director of innovation at S&P Dow Jones Indices, said the company has been actively exploring cryptocurrencies in recent years. Last year, S&P introduced a cryptocurrency index that tracks the development of the crypto market. SPBTC and SPETH are good examples of indices looking to solve the volatility problem in their respective cryptocurrencies, Liebowitz said.


The new ETPs complement 21Shares' Crypto Winter Suite, which is geared towards the bear market. 21Shares launched the offering in June, aiming to offer investment products specifically designed for low-cost exposure to crypto amid the market sell-off.


Just like the other crypto ETPs from 21Shares, the Crypto Winter Suite is also aimed at retail and institutional investors in countries such as France, Germany, Switzerland, Austria, Sweden, the Netherlands and Australia.


Despite the ongoing bear market , 21Shares has seen inflows into its platform and recently managed $100 billion in assets. "While our assets under management are currently declining due to market conditions, our inflows are at an all-time high," said Krause. He added that 21Shares currently has $1 billion in assets under management. He further explained:


“Investors are holding up well and continue to attract inflows over the long term. Investors who believe in crypto are buying the pullback. They are doing so particularly through ETPs as they are a transparent, convenient and safe way to enter the asset class.”

According to Grayscale Investments, the current bear market could last another 250 days from July 2022 if the market behaves like previous bear markets .

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