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In order to attract investors back to digital assets amid the historic crypto crash, fund managers are cutting down on the price of exchange-traded products.
21Shares, a crypto specialist based in Switzerland, has released the latest vehicle that monitors the Bitcoin price that, gives tough competition to its rivals and its own flagship products in an attempt to lure investors as they try to come out of the crypto winter.
Approx. 0.21 percent is the total expense ratio of the latest listed security by 21Shares. Still, it is lower than the last round of cost-cutting while firms such as Global X and Fidelity offered products related to Bitcoin in the range of 0.4-0.7 percent. It is also miles away from the 1.49 percent fee charged by the existing $164mn flagship Bitcoin ETP (ABTC) of 21Shares.
Chief executive and founder of 21Shares, Hany Rashwan, said that some of their customers care more about the cost than others; therefore, they were working on the cheapest crypto ETP in the world. Hany added that their focus is on creating bear market products.
However, Bitcoin Core ETP (CBTC), based in Zurich, has a twist. Opposite its rivals, it could give some of its inventory of BTCs and could possibly also help in making a profit despite the low fees.
Rashwan also shared that it is currently not lending out coins, adding that in the next one or two months, there is the possibility that they will start lending.
Moreover, the chief executive of investment research group New Constructs, David Trainer, says that the structure of 21Shares’ loans makes sense; however, the risks left for borrowers are still defaulting.
He also added that as the crypto goes further down, people will realize that some companies are overexposed.
Rashwan also added that the launch marks the first installment of 21Shares’ “crypto winter suite,” which is created to aid investors in the bear market.
Its plans include risk-adjusted crypto ETPs that will offer some downside protection in return for surrendering some potential gains “so the investor can have more confidence investing at this point.”
Risk-adjusted crypto ETPs that, in return for giving up some potential gains, will provide some downside protection as part of their plans, instilling more confidence in individuals investing at this time.
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