The recent decrease in the price of Bitcoin (BTC) has not deterred the success of Bitcoin ETP, which was recently launched on the SIX Swiss Stock Exchange and this points to one possible reason, the purchase of the dip by institutional investors.
Towards the end of last month, it was reported that a Bitcoin ETP with the $HODL ticker from Amun Crypto was getting ready to start trading on the Swiss Exchange called SIX.
The ETP symbolizes security that is entirely collateralized which is distributed, exchanged and redeemed by using the same structure. The HODL ETP most significant share is comprised of Bitcoin at 48%, the next on the line is (Ripple) XRP at 30%, Ethereum follows closely at 17.6%, while Bitcoin Cash and Litecoin have smaller shares.
An ETF and ETP are not the same thing. An ETP operates without being under the control of Cisa, which stands for Collective Investment Schemes Act and Finma does not supervise it either.
There are four major digital assets which make up the HODL ETP, and they include LTC, ETH, BTC and XRP.
Just last week Thursday and Friday, an exciting event occurred which was the rise in the volume of shares to 53,233 and a shares trade that amounted to 62,986. This is a great improvement when compared to the former 20,000 shares that used to be traded every day on the average, and this increment happened at the same time Bitcoin price decreased drastically last week’s ending.
The FX Hedge Fund CEO, Su Zhu, said that the “correlation between volume and price continues to be very strong at -68%.
Last Thurs and Fri we broke volume records again on the Swiss HODL ETF with 53,233 shares and 62,986 shares traded respectively. That coincided with the dip in BTC to 3.2k and ETH to near 80. The correlation between volume and price continues to be very strong at (-68%). https://t.co/Meuaa9MXCV
— Su Zhu (@zhusu) December 11, 2018
Companies Buying the Dip
Regarding the HODL ETP, Zhu noted that a negative relationship exists between the volumes and price. What this means is that as the price of BTC dips, the trading volume of the ETP will be on the increase and when the price of BTC increases, the trading volume of ETP will decrease.
The expert also disclosed that net inflow is highly responsible for the increased volume recorded which means that the customers purchasing the ETP are not doing so for the purpose of trading; instead, they buy ETPs to hold them.
Based on a data newly obtained from LocalBitcoins, a Bitcoin trading platform, users based in Venezuela and Argentina might be participating in the purchase of the dip.