With cryptocurrency markets shrinking over 50% this year, 21Shares is working to replicate S&P Dow Jones Indices\u2019 benchmarks with its new risk-adjusted crypto investment products.<\/p>\n
The Swiss crypto investment firm 21Shares has launched two new exchange-traded products (ETP) offering investors exposure to the largest cryptocurrencies \u2014 Bitcoin (BTC) and Ether (ETH) \u2014 while aiming to soften volatility via rebalancing assets to the United States dollar.<\/p>\n
The new products, the 21Shares S&P Risk Controlled Bitcoin Index ETP and 21Shares S&P Risk Controlled Ethereum Index ETP, will start trading on the Swiss SIX Exchange on July 20. The ETPs will trade under tickers SPBTC and SPETH, the firm announced on Wednesday.<\/p>\n
Both ETPs target a volatility level of 40%, which is achieved through dynamically rebalancing or allocating more assets to USD when volatility rises. The products seek to replicate S&P indexes\u2019 benchmarks that control risk by adjusting the exposure to the underlying index and dynamically allocating to U.S. dollars.<\/p>\n
21Shares\u2019 director of ETP, Arthur Krause, emphasized that the 40% target refers to volatility rather than investment performance. In a statement to Cointelegraph, Krause noted that large-cap equities in the United States demonstrated annual historical volatility of 20%. For Bitcoin, this figure stood at 70%, while Ether\u2019s volatility amounted to 80%, he said, adding:<\/p>\n
\u201cThe 21Shares S&P Risk Controlled Index ETPs combine exposure to a volatile cryptocurrency with cash \u2014 which has zero volatility \u2014 to attempt to achieve the overall target of moderate volatility.\u201d<\/p><\/blockquote>\n
Sharon Liebowitz, senior director of innovation at S&P Dow Jones Indices, mentioned that the firm has been actively involved in crypto in recent years. Last year, S&P launched a cryptocurrency index tracking crypto market performance. SPBTC and SPETH are examples of indexes aiming to address volatility associated with underlying cryptocurrencies, Liebowitz noted.<\/p>\n
The new ETPs join the 21Shares\u2019 bear market-focused offering known as Crypto Winter Suite. 21Shares launched the investment offering in June, aiming to provide investment products specifically designed for low-cost exposure to crypto amid the market sell-off.<\/p>\n
Just like the other crypto ETPs by 21Shares, the Crypto Winter Suite targets both retail and institutional investors in countries like France, Germany, Switzerland, Austria, Sweden, Netherlands and Australia.<\/p>\n