Vontobel has become the first Swiss structured products issuer to offer a tracker certificate on bitcoins for subscription targeted at investors expecting a positive development in the bitcoin price.
The new two-year Voncert on Bitcoin (CH0327606114) tracker which has a nominal of US$665 and an issue size of 1,500 certificates, was listed yesterday on the SIX Swiss Exchange and will be open for subscription until July 14.
The new product demonstrates "once again" Vontobel's "capacity for innovation as one of the leading providers of structured products", according to Roger Studer (pictured), head of Vontobel Investment Banking. "The new bitcoin certificate will for the first time give investors a simple and transparent means of investing in bitcoins on the SIX Swiss Exchange," said Studer.
The certificate on Bitcoin in USD is a classic tracker certificate as per the definition of the Swiss Structured Products Association (SSPA) that offers investors a simple means of participating in the development of the bitcoin price versus the US dollar.
Vontobel submitted the certificate for admission to the SIX Swiss Exchange yesterday and the products is subject to bitcoins being approved as an underlying. The first day of trading will be July 15, 2016, and the final fixing will be made on July 16, 2018.
Between those dates, investors will be able to trade the Vontobel certificate on the secondary market. The current price of a bitcoin is US$671.22, compared with US$268.49 (same time last year).
Bitcoin is a digital and decentralized cryptocurrency that has had a choppy ride since it became established in 2013 after gaining 5,429%. The currency then became the worst-performing currency in the world after losing 56% of its value in 2014, although it staged a comeback in 2015 overtaking the dollar by 35% by the end of the year.
This is the first bitcoin-related product to be recorded in the global structured products market but the virtual currency has been opening markets since 2012 when the very first regulated bitcoin fund was launched in Europe. That first exchange-traded fund (ETF) was named 'the Bitcoin Fund', and was traded exclusively on the Hedge Fund Marketplace platform, Exante. The fund achieved the biggest single investment vehicle gain in world history, with a 4,847% return, when Bitcoin's price spiked at the end of 2013.
Shortly after, in 2013, the Winklevoss twins filed an application with the US Securities & Exchange Commission (SEC) to launch an ETF in the US tracking the performance of the Winklevoss Index, an index that provides a blended price for bitcoins in US dollars for the top three (by volume) qualified Bitcoin Exchanges during the previous two hour period using a volume-weighted exponential moving average. In addition, in 2014, Global Advisors launched the Global Advisors Bitcoin Investment fund (GABI) in the island of Jersey, and in 2015 the Bitcoin Investment Trust (BIT) issued by Barry Silbert began trading in the US after getting approval from the Financial Industry Regulatory Authority (Finra).
Vontobel is one of the leading issuers of structured products in Europe and ranks second in Switzerland with a market share of 26.6% and fifth in Germany with a market share of 8.2%. The Swiss bank has been on expanding mode since 2015 after entering the Swedish and Finnish markets in 2015, as well as joining the Austria certificate association (Zertifikate Forum Austria - ZFA) in January 2016 and launched its first range of leverage certificates in Italy.
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