The crypto exchange-traded product (ETP) that was launched on a Swiss exchange last week has been clocking good trade volumes.
ETP Clocks Good Numbers
Earlier this month, Live Bitcoin News reported about the world’s first crypto Exchange-Traded Fund (ETF) getting listed on SIX Swiss Exchange, Europe’s fourth-biggest traditional stock exchange.
A week after its launch, the product has clocked the highest turnover of any product on the exchange.
The fund that was introduced by cryptocurrency firm Amun includes Bitcoin, XRP, Ethereum, Bitcoin Cash ABS, and Litecoin. It’s the first such fund in the world to cover Ripple, BCH, and LTC.
Beats Other Products Hands Down
The Amun ETP hit a daily turnover of 425,000 CHF ($425,000) at closing on November 26, beating several commodity products in silver, crude oil, and gold.
High trading volume is an indicator of investor enthusiasm for a financial product. While the number clocked is higher than other products on the exchange, it is still small compared to the size of any large ETF in the United States.
To put this in perspective, according to etf.com, the SPDR Gold Shares ETF clocks in an average daily volume of $987 million.
However, the high trade volume for the Amun ETP on the SIX exchange indicates the demand for such crypto-based products in the market.
Reasons for the High Volume
According to Richard Johnson, a market structure expert at Greenwich Associates, the high volume might be a result of trading firms looking to gain from arbitrage-based trades between the ETP and the underlying spot market.
The sudden drop in the digital assets market over the last few days and further prospects of a decline has left traders, investors, and hedge funds desperate to leverage arbitrage or futures to make up for the losses.
A source familiar with the product is reported to have revealed that the volumes have been contributed equally by retail investors and institutions.
It is reported that Jane Street Financial and Flow Traders, two specialist market makers, have become active traders of the underlying digital assets as authorized participants for the ETP.
The two firms provided the initial liquidity by purchasing several units of the product. Both firms have not revealed details about their investments in the product or their trade volumes.
The high trade volumes on the SIX exchange can be looked upon as an indicator of the investor sentiment. The much awaited and anticipated ETF in the U.S. could take the crypto market to the next level due to the participation of institutional investors.
However, the massive drop in the crypto market over the last few days has impacted the Amun ETP as well. The product, which made a debut at a price around $13.80, has since dropped by 15% to $12.40 a unit.
Do you think the great response to the Amun ETP is welcome news? Let us know in the comments below.
Images courtesy of Shutterstock.