Swiss fintech firm Leonteq launched last week tracker certificates on bitcoin in CHF, EUR and USD. The new suite of exchange-traded notes tracking bitcoin is targeted at investors seeking to capitalize on the cryptocurrency rapid price rise.
Since the start of 2017, bitcoin has increased in value by over 300%. Manuel Duerr, head of public distribution at Leonteq, said the company has seen an increasing number of requests for products related to cryptocurrencies, such as bitcoin, over the last couple of weeks.
The certificate gives investors an easy way to invest into Bitcoin via their online banking/trading. Normally Bitcoin need to be traded via a special wallet, this is for most private investors to complicated and also for institutional this is mostly restricted.
The certificate is split 1:10, therefore with one certificate investors buy 0.1 BTC. The Bid-Ask spread is very fair and the financial institution charges an acceptable yearly 0.5% total expense ratio (TER). The product is traded on the regulated Swiss Stock exchange.
Bitcoin and cryptocurrencies in general have become increasingly popular this year, a trend that’s been translated in the rapid growth in users and transactions. The number of bitcoin holders has increased from just under 11 million people at the start of the year, to over 16 million people by the end of August. According to CoinMarketCap, there are currently over 1,000 cryptocurrencies, collectively accounting for a market capitalization of over US$150 billion.
But it is not only the digital community that is increasingly making use of it – acceptance of bitcoin by businesses and, more recently, by individual nations, too, has grown. In the spring of 2017, Japan became the first country to recognize the digital currency as a legal means of payment, with Australia following in July.
Bitcoin is also becoming increasingly socially acceptable in the capital market too with applications being filed with the relevant authorities in the US and Switzerland for licensing of bitcoin exchange-traded funds (ETFs).
The Moscow Stock Exchange is currently working on an infrastructure for trading in cryptocurrencies. These developments underline the growing importance of bitcoin.
In July, Falcon Group became the first Swiss private bank to provide cryptocurrency asset management solutions for its clients through a cooperation with Bitcoin Suisse. The launch of Bitcoin asset management followed the approval from the Swiss Financial Market Supervisory Authority (FINMA). Falcon Group later added support for Ether, Litecoin and Bitcoin Cash.
Additionally, a Bitcoin ATM was installed in the lobby of Falcon Private Bank’s headquarters in Zurich and is accessible for the public during business hours.
Despite increasing acceptance and adoption, cryptocurrencies remain highly speculative and experts have warned about the risk of a bubble.
JP Morgan Chase chief executive Jamie Dimon called bitcoin a “fraud” at an event in September.
“If we had a trader who traded bitcoin, I’d fire them in a second,” Dimon said. “It’s against our rules.” Any trader that dealt in them, he added, was “stupid.”
Angela Walch, associate professor at St Mary’s University School of Law and research fellow at the Centre for Blockchain Technologies at University College London, told the Guardian:
“We’re in a cycle where prices have been driven up and now crypto hedge funds are driving them up higher. It’s a game, and it looks very much like a bubble. Of course, there’s no way of knowing when a bubble is going to pop, but that’s what it looks like.”
Featured image: Bitcoin via Pixabay.
