Amid the crypto market downturn, Swiss crypto ETP issuer 21Shares is now offering investors low-risk exposure via its BTC & ETH ETPs.
Leading crypto exchange-traded products (ETPs) issuer 21Shares has launched S&P risk-controlled Bitcoin and Ethereum ETPs. This comes amid the broader crypto market downturn that has eaten into the overall market cap of several digital assets.
Despite the pervading crypto market underperformance, 21Shares has seen its new crypto inflows hit new year-to-date record highs. Now with its new risk-adjusted crypto investment products, the Swiss platform is targeting less volatility. The 21Shares ETPs will also allocate more to cash during periods of volatility, and rebalance assets to the USD.
The two new ETPs will offer investors exposure to the two most prominent digital currencies BTC and ETH. With this, 21Shares looks to replicate S&P Dow Jones Indices’ (SPDJI) benchmarks with the relatively low-risk investment products.
Details of New 21Shares ETPs
The 21Shares S&P Risk Controlled Bitcoin Index ETP (SPBTC) will track the S&P Bitcoin Dynamic Rebalancing Risk Control 40% index. Likewise, the 21Shares S&P Risk Controlled Ethereum Index ETP (SPETH) will track the S&P Ethereum Dynamic Rebalancing Risk Control 40% index. In addition, both ETPs will launch on the Six Swiss Exchange from today, with total expense ratios (TERs) of 2.50%.
Speaking on the ETP initiative, 21Shares director of ETP products, Arthur Krause, explained:
These newest ETPs based on SPDJI world-class indices allow investors to realize the benefits of these innovative crypto exposures while controlling for volatility.
“These ETPs are the next step in our crypto winter suite, providing investors with entry to the asset class in a risk-controlled manner,” added he.
In addition, Sharon Liebowitz, senior director for innovation at S&P Dow Jones Indices also weighed in, adding:
Over the last two years, SPDJI has been developing cryptocurrency indexing capabilities to help promote more transparency and facilitate access to this emerging technology-driven asset class.
Both ETPs target a volatility level of 40% by adjusting the exposure to the underlying index and dynamically allocating it to USD. However, Krause also points out that the 40% target has to do with volatility rather than investment performance. He also said that large-cap equities in the US had annual historical volatility of 20%. Meanwhile, the BTC’s annual historical volatility is 70%, while Ethereum’s is 80%, Krause concluded.
Krause also provided insight on the ETPs, saying that they “combine exposure to a volatile cryptocurrency with cash – which has zero volatility”. This is to achieve the stated overall goal of moderate volatility.
Exchange-Traded Products are the Latest Additions to 21Shares’ ‘Crypto Winter’ Range
The ETPs also represent 21Shares’ latest product offering for the crypto winter. Last month, the Swiss platform and foremost issuer of crypto ETPs, launched its first product designed to weather the prolonged crypto bear market this year. The product took the form of the world’s cheapest physical bitcoin ETP. Dubbed the 21Shares Bitcoin Core ETP (CBTC), this product is the first in 21Shares’ new suite. It was listed on the SIX Swiss Exchange upon launch with a total expense ratio (TER) of 0.21%.