If there is one factor that could drive the crypto market forward, then it is the creation of more derivatives, especially ones that can be traded on a traditional stock exchange.
Happily, one of such products, the first of its kind in the crypto space has been approved by Swiss regulators and will go live this week according to FT report.
Amun AG, a crypto startup have been given the green light to list ‘HODL,’ an index fund that tracks some of the largest cryptocurrencies by market cap. The fund will trade on the Six Swiss Exchange, the fourth largest stock exchange in Europe with a market capitalization of over $1.6 trillion.
No doubt, the existence of such an index fund will allow institutional investors and individuals in the mainstream to invest in cryptocurrencies without directly getting involved with them. In simpler terms, they could hold crypto without setting up their wallets.
CEO of Amun AG, Hany Rashwan also pointed out that such an index will benefit crypto enthusiasts who cannot get involved in the space because of “local regulatory impediments” associated with crypto exchanges.
HODL Fund Overview
At the time of writing this report, the HODL index fund had five cryptocurrencies in its basket, Bitcoin 46%, XRP 31%, ETH, 15.8%, Bitcoin Cash ABC 3.66% and Litecoin 2.64%. The startup revealed that invested funds are allocated based on the market performance of the cryptocurrencies.
A 2.5% percent annual management fee is attached to the crypto basket investment which will be available to traders on the SIX Swiss Exchange by the start of the new week. Amun AG also plans to launch trackers for individual cryptocurrencies shortly.
The crypto community has long wished that the U.S SEC approves a Bitcoin ETF while the regulators having been proving difficult by rejecting several applications to list the index on a traditional exchange.
With Switzerland now leading the way, it will be interesting to see whether similar crypto-backed derivatives will be launched on more European exchanges. That would be an active catalyst for massive adoption.