Swiss financial houses Vontobel AG and Leonteq Securities AG have today launched separate products to allow investors to bet on bitcoin price drops.
Swiss asset management firm Vontobel is launching the country's first two mini futures to bet against the price of the world's most prominent cryptocurrency. First reported by Reuters, the two futures will see their launch today on SIX exchange, Switzerland's principal stock exchange. Termsheets released by Vontobel reportedly reveal that a 10 percent fall in bitcoin's value will see the conservative futures product gain by 6%, while the other product stands to gain nearly 10%. Single day price swings of 10% aren't uncommon with bitcoin and the product could prove popular among traders.
Eric Blattmann, head of public distribution of financial products at Vontobel is quoted by Bloomberg as stating:
We have seen big demand for our long tracker certificate from investors interested in playing the upside potential of bitcoin, and now they have also the possibility to hedge their position or go short.
Separately, Swiss structured products house Leonteq Securities AG is also launching a new short note with a two-month maturity compared to Vontobel's longer-stay product. "The initial feedback has been extremely positive," said Manuel Dürr, head of public solutions at Leonteq, speaking to Bloomberg. "Clients do very much appreciate the possibility of choosing between a long or a short investment in bitcoin."
The launch of the products come in the weeks following an announcement by the CME Group, the world's largest exchange operator and owner, launching a futures contract for bitcoin in the second week of December. The impact has been telling. Earlier this week, London-baed Man Group – a $100 billion hedge fund – revealed it would follow CME's example by adding bitcoin.