With cryptocurrency markets shrinking 50 plusPercent this season, 21Shares will work to duplicate S&P Dow jones Johnson Indices’ benchmarks using its new risk-adjusted crypto investment products.
The Swiss crypto investment firm 21Shares has launched two new exchange traded products (ETP) offering investors contact with the biggest cryptocurrencies — Bitcoin (BTC) and Ether (ETH) — while planning to soften volatility via rebalancing assets towards the U.S. dollar (USD).
The brand new products, the 21Shares S&P Risk Controlled Bitcoin Index ETP and 21Shares S&P Risk Controlled Ethereum Index ETP, will begin buying and selling around the Swiss SIX Exchange on This summer 20. The ETPs will trade under tickers SPBTC and SPETH, the firm announced on Wednesday.
Both ETPs target a volatility degree of 40%, that is achieved through dynamically rebalancing, or allocating more assets to USD when volatility increases. These products aim to replicate S&P indices’ benchmarks that control risk by modifying the contact with the actual index and dynamically allocating to U.S. dollars.
21Shares’ Director of ETP Product Arthur Krause emphasized the 40% target describes volatility instead of investment performance. Inside a statement to Cointelegraph, Krause noted that giant-cap equities within the U . s . States shown annual historic volatility of 20%. For Bitcoin, this figure was at 70%, while Ether’s volatility amounted to 80%, he stated, adding:
“The 21Shares S&P Risk Controlled Index ETPs combine contact with an unpredictable cryptocurrency with cash — that has zero volatility — to try to attain the overall target of moderate volatility.”
Sharon Liebowitz, senior director of innovation at S&P Dow jones Johnson Indices, pointed out the firm continues to be positively involved with crypto recently. This past year, S&P launched a cryptocurrency index tracking crypto market performance. SPBTC and SPETH are types of indices planning to address volatility connected with underlying cryptocurrencies, Liebowitz noted.
The brand new ETPs join the 21Shares’ bear market-focused offering referred to as Crypto Winter Suite. 21Shares launched an investment offering in June, planning to provide investment products particularly created for low-cost contact with crypto among the marketplace sell-off.
Much like other crypto ETPs by 21Shares, the Crypto Winter Suite targets both retail and institutional investors in countries like France, Germany, Europe, Austria, Norway, Netherlands and Australia.
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Regardless of the ongoing bear market, 21Shares has witnessed an increase in inflows on its platform, lately hitting $100 billion in new assets under management (AUM) year-to-date. “While our AUM is lower now because of the market conditions, our inflows are in an exciting-time high,” Krause stated, adding that 21Shares presently has $1 billion in AUM. He added:
“Investors are holding strong but still creating inflows for that lengthy game. Investors who have confidence in crypto are ‘buying-the-dip” — especially via ETPs like a transparent, convenient and safe method to go into the asset class.”
Based on Grayscale Investments, the present bear market could last another 250 days from This summer 2022 when the time period of previous cycles repeats itself.
