Bank Frick and Bitcoin Suisse issued a Bitcoin-Ethereum tracker. The launch came just one day after Bank Frick announced their Head of Blockchain, Mauro Casellini, will join Bitcoin Suisse as the CEO of the firms Liechtenstein arm.
Bank Frick will be acting as the issuer, while Bitcoin Suisse will be the broker responsible for execution and transaction of the asset across different exchanges worldwide.
Bank Frick CEO Edi Wögerer already said before the launch that he sees great potential for future cooperation between both companies. Likewise, Bitcoin Suisse CEO Arthur Vayloyan said on 8th April, “There are already some upcoming joint projects in the pipeline, and we will be able to present additional innovative solutions shortly.”
Actively managed BTC-ETH portfolio with quarterly adjustments
The certificate is an actively managed portfolio. An investment committee including Bank Frick and Bitcoin Suisse will decide on the weighing of the underlying assets every quarter. At its launch on 9th of April, the portfolio was equally weighted, and it will be adjusted based on market conditions.
The duration of the tracker is a two-year term. Bitcoin Suisse will use cold storage and multi-signature access to store the assets. Stefan Lütolf, Head of Trading & Brokerage at Bitcoin Suisse, says about the product, “With the active BTC-ETH tracker we demonstrate our joint expertise and provide investors with a new form of capital market access.”
Raphael Haldner, Head of Funds and Capital Markets at Bank Frick says, “The product’s design demonstrates the innovative capacity that links Bank Frick and Bitcoin Suisse. With our certificate, professional market participants benefit from a future-oriented capital market solution.”
Tracker is available as a classical security and as a token
Only qualified investors will have access to the tracker. Thus, Bank Frick again reaches out to institutions, trying to gain momentum among a still reluctant potential customer base. In February, a trading platform for institutional investors.
It makes sense for the bank to launch products and platforms targeting institutions already before they have entered the market. They will come at one point. Bank Frick can seize the opportunity and tap into this market early.
Whether or not there will be significant buyer interest remains to be seen. Bank Frick mentioned in the official press release the tracker enables qualified investors to “diversify their portfolios in a simple manner with cryptocurrencies.” However, it only includes two cryptocurrencies. Also, BTC and ETH are highly correlated, with a correlation of more than 80% in 2018. Thus, the diversification aspect of a BTC-ETH tracker is not that great.
What is exciting about the product though, is that it’s available as a classical security and as a token. Investors can access the certificate via ISIN and ERC20 token. Thus, traditional investors, who are not particularly “blockchain-savvy,” can use the tracker to invest in Bitcoin and Ethereum.
Image: ©Bank Frick