Swissquote Group Holding SA, (SWX: SQN), specializing in online financial and trading services have expanded its crypto offerings with a launch of first actively managed multi-cryptocurrency Certificate, called “Multi-Crypto Active Index”. It will be powered by Swissquote’s machine learning algorithm and will be listed on Switzerland’s largest stock exchange, the Six Swiss Exchange.
The objective of the Multi-Crypto Active Index certificates is to achieve capital growth by using an actively managed portfolio that shifts holdings between cash and four different cryptocurrencies. This exchange-traded product will allow main-stream investors to invest in the diverse portfolio of four different cryptocurrencies through traditional financial platform thus eliminating the need to invest directly in the virtual asset class, which regulations prohibit.
The certificates consist of four different cryptocurrencies selected on the basis of liquidity and highest market capitalization: Bitcoin, Bitcoin Cash, Ethereum, Litecoin. This will ensure distribution of risk and lowers the probability of potential losses when compared to invest in a single cryptocurrency.
The certificates will trade under the symbol SQCRTQ priced in USD with a minimum investment of $1,000 and an expense ratio of 1.5 percent per annum. The certificate will have a three-year term life with the first day of trading on March 14th, 2018 and last day will be on March 8th, 2021. Between these dates, investors will able to place their bids and offer prices on the secondary market. Each cryptocurrency will have a minimum weight of 10 percent in the portfolio with a maximum weight can go up to 70 percent.
The investment dimension will be affected by Swissquote’s quantitative algorithm developed by Swissquote’s Quantitative Asset Management team. The algorithm uses historic price movement and predicted future directions to optimally distribute investment across four cryptocurrencies. The algorithm helps to stabilize the price volatility thereby reduces the risk of losses.
Peter Rosenstreich, Head of Market Strategy at Swissquote, said: “It is the next evolutionary step in our strategy of opening up the cryptocurrency market to the mainstream investor by creating investment opportunities that reduce volatility while offering the transparency that comes with the listing at the Swiss Exchange. This new portfolio is designed for investors who recognize the potential of cryptocurrencies but rather than taking the risk of investing in a single one, look for a structured product that is easy to trade and actively managed.”
Swissquote has been using its deep digital experience of handling investment portfolios to drive its foray into cryptocurrency segment. It is the first European online bank to offer Bitcoin trading on its platform in November 2017. Through its algorithm-driven systematic approach, it eliminates the biases and emotions involved in decision making. It helps investors to make right exposure to this volatile digital asset class without fully exposed to risks such as hacking or management of private keys.
