{"date":"2022-11-18T00:00","headerImageUrl":"https://structuredproducts-ch-pub-uat.leonteq.com/product-news/product-homepage-banner/cryptomarket-leonteq-structured-products_product+homepage+banner.jpg","subTitle":"Broad crypto product range allows focused investment","windowTitle":"Crypto assets: endurance test for investors","category":"investment-themes","title":"Contrarian trading","body":"

For and against<\/h3>\n

\u201cBuy when the cannons roar\u201d, goes an often quoted stock market rule first expressed by the banker Carl Mayer von Rothschild back at the start of the 19th century. In other words, investors should go against the tide, investing when the bulk of stock market players are fleeing the trading floor in panic and prices are falling. It is precisely such panicked sell-offs that are the order of the day on the crypto market at the moment. Dogecoin, for instance, recently lost around a third of its value within the space of a single week, while Solana, regarded as the pioneer in the verification of transactions using the Proof-of-Stake method, even fell by almost a half. Although such price ups and downs highlight the fragility of the crypto market, they do not diminish the significance of digital assets. Blockchain is a mature technology on which the next stage of the internet \u2013 think web3 \u2013 is being built, among others. Indeed, central banks have already leapt onto the crypto bandwagon. According to the latest statements from ECB president Christine Lagarde, the ECB is already at a relatively advanced stage in its search for a central bank-supported digital currency.<\/p>\n

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Regulatory efforts<\/h3>\n

That cryptos remain in demand is demonstrated by a new study entitled \u201cCrypto and Established Financial Institutions\u201d produced by Crealogix, a Swiss fintech 100 company. This comes to the conclusion that demand for crypto services will continue to grow. Another factor in favour of the digital currencies is that \u2013 unlike the situation a couple of years ago \u2013 they have shaken off their \u201cWild West\u201d status thanks to much tighter regulation. At the beginning of July, for instance, the European Union was the first major economic region to agree on regulations for cyber currencies. In light of the recent upheavals, the global Financial Stability Board (FSB) has proposed worldwide rules for crypto assets. The FSB has put forward nine recommendations in total. These require crypto firms to hold capital, just like banks, when they conduct similar business to financial institutions. The new proposed regulations are to be finalised by the middle of next year before being rapidly implemented by the FSB member states. Similar noises can even be heard from the industry, too. \u201cWe do need some regulations, we do need to do this properly, we do need to do this in a stable way,\u201d said Changpeng Zhao, the boss of crypto exchange Binance, at the G20 meeting in Bali. The industry collectively had a role to protect investors, he added.<\/p>\n

Broad product range<\/h3>\n

Despite the progress in regulation, investors must always be aware of the risks associated with crypto assets. The opportunities are also enormous, though. Since the launch of Bitcoin in 2009, the crypto market has already survived several \u201ccrypto winters\u201d and come through plenty of bull markets. Leonteq gives prospective buyers a broad array of options for investing in the still young sector. The universe comprises a total of 30 crypto assets in which tracker certificates enable one-to-one participation. Half of them are listed on the SIX Swiss Exchange and five on the BX Swiss, with the rest available over the counter. The market-leading product range extends from 0x through Chainlink and Polkadot to Solana and Yearn.Finance. The management fee for each certificate is 1.50% p.a.<\/p>\n

Diversified investment<\/h3>\n

The Leonteq Crypto Index gives investors an opportunity to \u201ckill 11 birds with one stone\u201d or, to put it better, \u201cbuy 11 cryptos in one go\u201d. The actively managed barometer is designed to allow in as many as 25 crypto assets. Their inclusion, though, is tied to certain selection criteria, such as sufficient fungibility, along with minimum requirements on liquidity and market capitalisation. The index is reviewed every quarter and adjusted where necessary. As already mentioned, the barometer currently consists of 11 members. These are dominated by Bitcoin and Ethereum, which together account for almost two thirds of the index's weight. The professional approach means that the management fee of 1.95% p.a. is slightly higher than that for trackers on individual cyber currencies, but these costs are actually relative modest given that this is an actively managed index. The trackers are offered in CHF, EUR and USD denominations. The comprehensive Leonteq crypto platform ultimately makes it hard to choose from the many different alternatives. In light of the considerable fluctuation on the market, however, the chosen capital commitment should always be consistent with the investor\u2019s own risk profile and their overall portfolio.<\/p>\n

Tracker Certificate on the Leonteq Crypto Market Index - tradable on SIX Swiss Exchange<\/h3>\n
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