As the crypto winter setles with bitcoin dipping below US$20,000 hitting investors hard we look at the latest developments in the structured products crypto space.
US-based ETF issuer ProShares launched on Monday (20 June) an inverse bitcoin ETF to offer investors a bet against the market’s leading digital asset. The ETF was listed shortly after last weekend’s pullback, which saw the token’s price slide below $18,000.
As recent times have shown, bitcoin can drop in value - Michael L. Sapir, ProShares
The ProShares Short Bitcoin Strategy (BITI) includes a management fee of 0.95%. BITI is the first bitcoin-linked futures ETF to bet ‘short’ on the leading crypto Bitcoin. Investors can leverage the ‘reverse’ returns on the Chicago Mercantile Exchange Bitcoin Futures Contracts Index.
‘As recent times have shown, bitcoin can drop in value,’ said ProShares CEO Michael L. Sapir (pictured), adding that the new ETF can be used to potentially profit from a fall in the price of bitcoin or to hedge their cryptocurrency holdings.
The investment product provider also launched the Short Bitcoin Strategy ProFund (BITIX) via its mutual fund affiliate firm ProFunds, which is intended to serve the same purpose as the short ETF.
CoinShares rolls out staked matic, cosmos ETPs
CoinShares has added two physically-backed ETPs to their growing range of staked ETPs listed on Germany’s main market Xetra.
Both the CoinShares Physical Staked Matic (CPYG) and CoinShares Physical Staked Cosmos (COMS) leverage the Company’s proprietary technology platform, Galata, to provide investors with exposure to the underlying cryptocurrency plus an additional yield of 5.0% p.a.
Matic is the native token of Polygon - a proof of stake blockchain tied to the ethereum network which offers a suite of scaling solutions to help make ethereum faster and cheaper while preserving most of the decentralised features and security benefits. Its future scaling solutions range from rollups that bundle and process transactions, to data layers where users can store transaction data cheaply.
Launched in 2019, Cosmos is the world’s largest ecosystem of interconnected chains. Cosmos is a proof of stake network that allows users to create their own blockchains with their easy-to-use software development kit. There are dozens of individual blockchains running with the cosmos architecture and moving forward, cosmos can be used to secure many of these chains. In return for securing the services on the cosmos hub, transaction fees and staking rewards are distributed to cosmos stakers.
Frank Spiteri (above-right), CoinShares’ chief revenue officer, said staked ETPs offer exposure not only to the price of the underlying cryptocurrency, but also the additional yield associated with participating in that blockchain’s security.
‘Staked coins do not move from the secure custodian where they are stored, and the ETPs remain 100% physically backed at all times,’ he said.
Coinbase to offer first crypto futures via third-party brokerage
Coinbase announced yesterday (23 June) that is set to introduce next week a Bitcoin futures contract offering on its recently acquired derivatives platform.
The ‘nano’ Bitcoin futures (BIT) will be available on the Coinbase Derivatives Exchange platform, previously FairX, starting Monday, 27 June. The CFTC-regulated firm is targeting retail investors futures contracts each worth 1/100th of a BTC, a fraction the exchange described as ideal since it doesn’t require a lot of upfront capital relative to traditional offerings.
The firm led by Brian Armstrong (right), co-founder & chief executive officer will not be directly involved in offering the BTC futures as it has partnered with a number of intermediaries including Admis, NinjaTrader, Wedbush, Advantage Futures, Ironbeam and Optimus Futures that will facilitate brokerage.
The crypto exchange also revealed that it is in the process of acquiring a futures commission merchant (FCM) license which will allow it to support the futures contracts without third-party brokers and clearing firms.
Singapore exotic structured products protocol debuts cap prot vaults
Singapore-based Cega Finance has announced its mainnet launch on the Solana blockchain today.
Cega is the first decentralized finance (DeFi) exotic structured products protocol to create investment vaults that offer principal protection and high yields.
According to the firm, after a successful devnet launch which attracted over 25K unique users, crypto retail investors can officially begin investing in its Cega vaults which comprise four fixed coupon note products including one vault that is exclusively available to Cega NFT holders.
‘Given recent market conditions, the investment vaults were designed carefully to help investors stay safe and manage their assets responsibly,’ said the firm in a statement. ‘Vaults offer principal protection against severe market movements up to a 90% price drop. This means that even if the crypto market falls by 90% in the next 30 days, investors do not lose their principal while still collecting the high yield.’
Cega’s inaugural vaults include Vault 1: Cruise Control which is linked BTC-ETH and pays an indicative 8% yield; Vault 2: Genesis Basket which is linked to a BTC-ETH-SOL basket and pays 12%; as well as the Vault 3: Gotta Go Fast also linked to a BTC-ETH-SOL basket which offers 50% protection and 80% participation on the basket growth; and Vault 4: Insanic which is linked to a ETH-SOL-AVAX basket offering 50% protection and 200% participation.
German exchange partners with Kaiko to expand crypto data offering
Deutsche Börse has entered into a cooperation agreement with crypto market data provider Kaiko to make their crypto data feed directly accessible to its customers.
In Q4, Deutsche Börse Market Data + Services’ distribution network will make historical L2 tick-level orderbook data on a T+1 basis and live trade data available, followed by the introduction of historical orderbook data for selected digital asset exchanges on a T+1 basis.
Kaiko collects the sequence of each executed trade or bid/ask quote aggregated from over 100 Centralised Exchanges (CEXs) and Decentralised Exchanges (DEXs) for both spot and derivatives markets.
According to the German exchange, Kaiko covers about 96% of the tick-level trading data from various DEXs and includes a majority of blockchain protocols such as ethereum or avalanche. The tick-level trading data collected from CEXs comprises more than 150,000 instruments for spot and derivatives markets.
‘Many of our clients have a high demand for consolidated data from centralised as well as decentralised exchanges to develop useful crypto investment strategies,’ said Alireza Dorfard (right), head of market data + services at Deutsche Börse. Our new offering fulfils this need, helps our clients gain a deeper understanding of the cryptocurrency market and allows them to analyse specific events,’