Cryptographic fund manager Amun AG has included a new bitcoin reverse product (ETP) on the Swiss primary stock exchange SIX.
A reverse Bitcoin ETP allows a positive return to be obtained when an underlying asset (in this case, Bitcoin) falls, as it allows the shorting. Amun’s reverse ETP, called “21Shares Short Bitcoin ETP (SBTC)“, allows investors to shorten bitcoin (BTC).
Say, for example, if a trader buys 100 USD from SBTC, a short position of 100 USD is opened. Assuming that the price of Bitcoin falls by 10%, the SBTC ETP would have a positive return of 10% (minus costs). SBTC charges an annual management fee of 2.5%.
By short-circuiting, SBTC allows operators to capitalize on negative price movements. Compared to short-circuiting through crypto derivatives, SBTC does not require borrowed capital.
With the addition of SBTC, Amun now has a total of 11 cryptographic ETPs listed on the stock exchanges. These ETPs are linked to the digital assets of bitcoin, ether (ETH) and XRP, among others. Although the other 10 ETPs are long products, while SBTC is the first short product.
Such ETFs already exist for traditional assets such as stocks and bonds. For crypto, SBTC is the first in the world.
Looking ahead, Amun plans to include its ETPs in at least two European exchanges by the end of 2020. Last month, Amun received regulatory approval from the Swedish Financial Supervisory Authority to expand its offerings in the European Union.