Switzerland-based Amun has launched the 21Shares Short Bitcoin ETP (SBTC) on the Swiss Stock Exchange (SIX), an exchange traded product tracking bitcoin’s price movements inversely.
“If you’ve ever tried trading options or futures, you’ll see that it’s pretty difficult,” AmunCEOHany Rashwansaid in a phone interview. “It’s not the easiest thing which is why it’s just easier to say ‘I think bitcoin price will go down, I’m going to buy this stock.’”
Compared to entering short trade positions on bitcoin – wherein an investor expects the price to fall and bets against an asset’s value rising by buying and selling a position on loaned funds – Amun’s Short Bitcoin ETP does not require loaned capital.
Rather, the fund captures bitcoin’s price movement inversely in one stock purchase akin to a synthetic exchange traded note (ETN) comprised of short positions. Furthermore, all positions reset at the end of the trading day with performances not rolling over to the next day.
Rashwan noted the rise of crypto derivatives, particularly from lightly or completely unregulated exchanges, which are taking up to 99 percent of the bitcoin derivative market’s volume compared to legacy providers such as CME Group or ICE’s Bakkt.
Indeed, crypto derivatives platform FTX traded some 2,405 options contracts traded on its inaugural day, Jan. 13, versus 54 options contracts on CME which opened the same day, according to financial publication Micky. Options on CME are constructed at 5 bitcoin per contract while FTX allows users to draft their own.
Hany Rashwan (pictured), CEO of Amun, commented: The one missing piece to the 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.”
Last December, Amun received approval from the Swedish regulator to distribute its products across the European Union (EU).