The Swiss Stock Exchange SIX promised to create crypto related exchange-traded products (ETPs) as we moved through 2019, and it delivered the first one this week. The XRP ETP allows institutional investors to gain access to XRP exposure by investing USD into the ETP dubbed the Amun Ripple XRP (AXRP) ETP. Its first trading day was Tuesday April 2nd and has had an overwhelming show of support so far. Earlier this year, SIX launched the world’s first crypto ETP that comprised of 50% Bitcoin, 25% XRP, and 25% of other top altcoins, making this the first ETP to be solely comprised of one crypto.
A New Crypto On-Ramp
Institutional and traditional investors have been left out of the crypto action for a considerable amount of time, with only a handful of products available to them. In September 2018, the US Securities Exchange Commission (SEC) killed the Bitcoin ETN, meaning investors had a popular alley into crypto closed off. This new crypto on-ramp in the form of the XRP ETP is proving to be popular with investors looking to gain exposure to XRP and diversify their portfolio away from traditional blue-chip equities and government bonds. We will see more traditional and institutional investors jumping into these ETPs should they continually provide high yield returns.
Another Crypto Exchange on the Way
If you thought SIX was going to stop at crypto products for institutional and traditional investors, you would be wrong. SIX is reportedly working on building its own digital asset exchange, set to launch by the end of 2019. The exchange will allow inventors to sign up and trade the crypto world just like they would on the likes of Coinbase, ShapeShift, or Binance, but from a well-known stock exchange. It won’t be the first stock exchange to dabble in crypto trading, as Gibraltar launched its own regulated blockchain exchange in November 2018.
The Amun Ripple XRP (AXRP) ETP carries a management fee of 2.5%, meaning heading to a crypto exchange and buying your own XRP will work out cheaper in the long run. However, for institutional investors that isn’t a choice, meaning they will have to lump the heft management fees. The XRP ETP is fully collateralized by either physical XRP or an XRP futures contract, meaning you’re not buying into a tokenized share of XRP, but the real deal. As the months go on, SIX is planning to list more ETPs including BTC, LTC, BCH, and XLM.