Amun AG, a Swiss company based in Switzerland's famous Crypto Valley, is launching this Wednesday the world's first multi-asset cryptocurrency index exchange-traded product (ETP) on the SIX Swiss Exchange, Switzerland's main stock exchange.
Amun AG, the issuer of the "Amen Crypto Basket ETP (ticker: HODL), is a fully-owned subsidiary of London-based Amun Technologies Limited.
Amun's product has two features that make it unique and a significant contribution to the crypto space:
- It provides exposure to a basket of five of the most popular and liquid cryptoassets rather than a single cryptocurrency such as Bitcoin (BTC).
- It is required by law to hold as collateral the five underlying cryptoasets.
HODL derives its value from the value of the five cryptoassets in the Amun Crypto Basket Index (ticker: HODL5).
HODL5, which was announced by MV Index Solutions (MVIS) and Amun on 6 September 2018, "tracks the performance of the top five crypto assets in terms of market cap and liquidity, providing diversified exposure to the crypto space while using its proprietary methodology to effectively manage the volatility associated with less liquid or smaller crypto assets." This index is re-balanced monthly "to ensure an accurate representation of the current crypto market." Its current components are Bitcoin (BTC), Ether (ETH), XRP, Liteoin (LTC), and Bitcoin Cash (BCH).
HODL5 removes cryptoassets are tied to a fiat currency (e.g. Tether), are designed to be anonymous (e.g. Monero), are not sufficiently liquid, trade mostly on exchanges that have a poor reputation, or have been traded for less than six months.
According to a report in The Financial Times (FT), for now, "just under half of the ETP’s assets will be invested in bitcoin with the remainder divided between XRP (25.4 per cent), ethereum (16.7 per cent), bitcoin cash (5.2 per cent) and litecoin (3 per cent)."
Hany Rashwan, co-founder and CEO of Amun, told the FT:
“The Amun ETP will give institutional investors that are restricted to investing only in securities or do not want to set up custody for digital assets exposure to cryptocurrencies. It will also provide access for retail investors that currently have no access to crypto exchanges due to local regulatory impediments."
The FT report also says that "Jane Street and Flow Traders, two specialist market makers, have provided seeding for the Amun ETP and agreed to act as authorised participants."
According to MVIS and Amun's press release, "while providing the smallest tracking error against the MVIS CryptoCompare Digital Assets 100 Index – which provides a broad market benchmark – for the same period, the Amun Crypto Basket Index generated the highest Sharpe ratio, a measure for volatility - adjusted return, at 19.03, compared to Coinbase at 7.62 and Bitwise’s Hold 10 at 8.78."
Thomas Kettner, Managing Director at MVIS, said:
“Cryptocurrencies have taken the world by storm since last year. Amun’s approach with a forward-looking and volatility adjusted weighting scheme is an enhancement of existing concepts and a valuable alternative for investors who do not want to follow the crowd.”
Over on Twitter, Gabor Gurbacs, the Director for Digital Assets Strategy at VanEck/MVIS, had this to say about Amun's HODL ETP:
Congratulations to @hany, @AmunAG and the country of #Switzerland for listing the first multi-asset #ETP!!! We are proud of you and thank you for choosing @MVISIndices to provide a regulated and financial-standard index backing #HODL. Index press release: https://t.co/CqZiUrVQG4 pic.twitter.com/wHO47ABjA4— Gabor Gurbacs (@gaborgurbacs) November 18, 2018