Boerse Stuttgart, Germany’s second biggest stock exchange that handles some $75 billion in yearly volumes, has made available for trading the world’s first inverse bitcoin Exchange Traded Product (ETP).
The inverse bitcoin ETP is by 21Shares’s and is approved by the Swedish Financial Supervisory Authority (SFSA) with the bitcoins “custodied in segregated accounts with an independent custodian,” they say.
This is hedged 1:1 to bitcoin and rises if bitcoin falls, or falls if bitcoin rises, to complement the other bitcoin ETP by 21Shares that tracks the price in a way whereby it rises if bitcoin rises.
“This is an important milestone for traditional investors and the crypto community alike as SBTC is effectively available to both retail and institutional clients in Germany and the rest of Europe,” says Laurent Kssis, Managing Director of 21Shares, further adding:
“This was not an easy feat and a lot of credit is due to the hard work of the team for their expertise in navigating the complexities of the traditional system and bringing these innovative digital assets to all European investors.”
You can thus now hedge from your stock portfolio against other stocks or indeed against bitcoin with these ETPs tradable as a normal stock.
That’s especially important in the current volatile markets as “with the introduction of the SBTC tracker, investors can immediately and securely capitalize on falling adverse price movements of the largest and most liquid digital asset,” 21Shares says.
Boerse Stuttgart itself also has a full crypto trading platform for bitcoin, ethereum, litecoin and ripple which was launched in 2018.
These are meant to be spot trading, while the ETP is more kind of a derivative but fully hedged with bitcoin.
There’s a bitcoin and ethereum ETN as well listed in Sockholm and accessible in USA, but American exchanges themselves have not yet been given the greenlight to list any such stock product by the Securities and Exchanges Commission (SEC) despite numerous studies showing the diversification and hedging benefits of bitcoin and ethereum in a stock portfolio.