New open-end bitcoin tracker certificate

New open-end bitcoin tracker certificate

27 October 2017, 4 commentsReading time: 3 minutes

Vontobel is expanding its bitcoin product range. The first open-end exchange-traded bitcoin tracker certificate will be available to trade on the stock exchange from 30 October 2017, providing an interesting option for all those who believe in the cryptocurrency but don’t want to have to deal with IT administration.

A little over a year ago, Vontobel became the first Swiss issuer to launch an exchange-traded tracker certificate on the cryptocurrency bitcoin, and it has since proven to be a resounding success. However, a lot has happened in the meantime: bitcoin exchanges were closed in China, initial coin offerings (ICOs) have hit the headlines time and again, there have been various splits or ‘hard forks’, and so on. Despite this long list of developments, interest in the cryptocurrency appears to be unwavering.

Other Swiss issuers have ultimately followed suit with their own investment products on bitcoin, albeit with a limited term. Vontobel is now to become the first to offer an open-end tracker, a certificate without any such restrictions allowing investors to harness the performance of bitcoin, with virtually 100% participation both on the upside but also on the downside. And this without a pre-defined redemption date.

Successful symbiosis now also available as an open-end product

The bitcoin certificate is a perfect example of how structured products can open up access to markets and also ‘exotic’ underlyings, and so make them investable. The successful symbiosis of a tracker certificate and bitcoin has given interested investors a ‘bankable’ investment instrument for this digital cryptocurrency, and thanks to the unlimited lifetime of the product they can essentially set their investment horizon themselves.

But why is Vontobel now launching a further certificate, this time an open-end product? The interest in bitcoin has risen steadily, and so too has the need to participate in its price performance. After Vontobel launched the first exchange-traded tracker certificate on bitcoin in July 2016 fixed at USD 664.05 per bitcoin, the price shot up – albeit with some sharp pullbacks – and now stands at just under USD 5,900 (derinet.ch, 26.10.2017). This translates into a performance of more than 770% in the space of just a year and three months since inception. However, past performance is not a reliable indicator of future price developments, and it must still be taken into account that an investment in bitcoin can entail considerable downside risks./p>

Structured in the form of a security, the certificate can be traded simply and transparently on the Swiss Exchange SWX like any traditional security.

Chart 1: Bitcoin price performance in USD (Bloomberg, 24.10.2017)

The certificate as an investment vehicle

‘Wallet’, ‘cold storage’, ‘private key’ – like many people, you might not know what these terms mean in the context of bitcoin. But you may nonetheless expect this ground-breaking cryptocurrency to enjoy long-term success. The exchange-traded tracker certificate on bitcoin allows you to participate in the bitcoin price in USD without having to have access to a bitcoin platform with your own bitcoin wallet. As an investor in the certificate, you therefore do not bear the risk of a loss of bitcoins as a result of hacker attacks, technical problems, improper handling, or the failure of a bitcoin custodian. As the issuer of the investment product, Vontobel is also responsible for handling any IT administration necessary in the event of a hard fork. Click here to read how Vontobel dealt with the Bitcoin Cash hard fork in August (Bitcoin Cash – what happens now?). That said, this process need not always be the same every time there is a hard fork.

Hard Fork

A hard fork in the bitcoin protocol can lead to a split into two separate cryptocurrencies. As a result, bitcoin exchanges can suspend the purchase and sale of bitcoins. During this period, no bid or ask prices would be provided by the market maker (i.e. the product would not be tradable). Vontobel can adapt the product to take appropriate account of the implications of a hard fork.

Open-end bitcoin tracker certificate with 10:1 ratio

The bitcoin tracker certificate launched last year will run through to its redemption date in July 2018. Like its predecessor, the open-end product will also be listed on the Swiss Exchange SIX. Unlike before, the newly issued bitcoin tracker certificate will have a subscription ratio of 0.1 (i.e. 10:1) and a management fee of 1.50% p.a. This will simplify tradability and lower the investment hurdle for investors.

The first trading day of the new open-end certificate on the exchange will be 30 October 2017. From this date, investors will be able to trade the certificates on the secondary market via their own bank (e.g. in online banking), buying and selling at the current bid/ask prices.

22/10/2019 18:40:59

 

4 Comments

Schädle Sonja

11. January 2018 at 12:09

Guten Tag

Gerne möchte ich Sie anfragen wie hoch ist der Betrag den ich einbezahlen muss um bei dem Bitcoin Zertifikat einzusteigen?

Vielen Dank für Ihre Rückantwort

MFG

Sonja Schädle

Vontobel Advisory Financial Products

15. January 2018 at 8:59

Liebe Frau Schädle

Besten Dank für den Kommentar.

Ein Tracker-Zertifikat auf den Bitcoin kann jeweils zum aktuellen Briefkurs über Ihre Hausbank gekauft werden. Das Zertifikat wird anschliessend in Ihr Wertschriftendepot bei der Hausbank gelegt.

Für weitere Fragen stehen wir gerne zur Verfügung.

Freundliche Grüsse

Vontobel Advisory Team

Michel

1. February 2018 at 0:25

Bonjour,

Pourriez-vous me dire sur quel cours du Bitcoin vous vous basez pour calculer la valeur du Tracker ZXBTAV, et celle du Put MXBTTV le cours du bitcoin étant différent entre les différentes plateformes de cotation comme Coinbase Bitstamp ou Kraken.

Meilleures Salutations

Michel

Vontobel Advisory Financial Products

13. February 2018 at 14:08

Bonjour Michel

Merci beaucoup pour le commentaire.

La base de calcul du certificat tracker sur le bitcoin en dollars n'est pas définie par une formule mathématique. Les bitcoins sont actuellement négociés auprès de trois bourses ("CoinBase","Kraken Bitcoin" et "Bitstamp"). L'agent chargé des calculs peut, à sa seule discrétion, retirer, échanger ou ajouter une ou plusieurs entités de référence (bourses de valeurs). Le prix du certificat est déterminé par le taux de change bitcoin/dollar, et l'opération peut également se couvrir ou liquider des positions.

Si vous avez d'autres questions, n'hésitez pas à nous contacter.

Meilleures Salutations

Vontobel Advisory-Team

 

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