21Shares launches Bitcoin and Ethereum ETPs with risk-threshold caps

The cryptocurrency ETP provider 21Shares announced the listing on the Swiss stock exchange of Bitcoin- and Ethereum-based products. Their defining feature is a built-in target volatility cap of 40%.

Today we’re launching two new products in our #Crypto Winter Suite, listed on @sixgroup:

— @21Shares S&P Risk Controlled Bitcoin Index ETP $SPBTC
— @21Shares S&P Risk Controlled Ethereum Index ETP $SPETH

Learn more: https://t.co/bCLxhpEYo1
#BTC #ETH #Bitcoin #Ethereum pic.twitter.com/T9AQPfu6vf

— 21Shares (@21Shares) July 20, 2022

The parameter is achieved through daily dynamic rebalancing. In periods of rising volatility, the cash allocation in US dollars increases, shrinking as markets calm and crypto trading steadies.

The 21Shares S&P Risk Controlled Bitcoin Index ETP and 21Shares S&P Risk Controlled Ethereum Index ETP, under tickers SPBTC and SPETH, effectively replicate the corresponding indices from Standard & Poor’s.

In an interview with Cointelegraph, 21Shares’ ETP director Arthur Krauze noted that the historical volatility of high-cap stocks on Wall Street is around 20%, while for Bitcoin and Ethereum it is 70% and 80%, respectively.

“A partial shift into cash with zero volatility and back into the ETP has helped to limit their risk,” he explained.

Total expense ratio of the instruments will be 2.5%.

SPBTC and SPETH will be an evolution of the crypto-winter ETP lineup that 21Shares announced at the end of June.

In May, 21Shares and asset manager ARK Invest filed a new joint application with the SEC to launch a Bitcoin ETF.

The regulator has not yet approved any application to launch a spot Bitcoin ETF.

Earlier, Grayscale analysts allowed for the end of the crypto-winter by the end of March 2023.

Later, Glassnode analysts calculated that Bitcoin was in a mid-term bottoming zone for 35 days. In the past, this period averaged 197 days.

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