Cryptocurrency exchange-traded product launches on SIX exchange

Daniel Diemers, FiCAS

The manager of the latest Swiss-based cryptocurrency ETP, listed on the SIX Exchange, describes itself as a cryptocurrency hedge fund, offering discretionary, active management of the top 15 cryptocurrencies.

The ETP, issued by Bitcoin Capital AG, is managed by FiCAS AG, has hedge fund style fees of 2 per cent management and 20 per cent performance, and will be managed under the leadership of its founder, Ali Mizani Oskui, who has been building his trading portfolio in cryptocurrencies since 2013.

Mizani Oskui has been joined by Dr Mattia L Rattaggi, as Chairman and Lead Advisor to FiCAS, and Dr Daniel Diemers (pictured), who joins the board, having been a Financial Services Partner at PwC Strategy& and former PwC Head of Blockchain for Europe, Middle East, and Africa.

Rattaggi describes the ETP product as unique, with its actively managed approach. “Other products are passive structures into which you put the money into an algorithm designed to replicate the underlying,” Rattaggi says. “But we are different - we are like a management mandate at a bank with a person who takes decisions to trade using a strategy and with the trading experience of Ali Mizani and his team, we have the institutional touch.”

The product can only be bought through banks and brokers. Diemers says: “The entire asset class is unfamiliar and it’s important to note that there are no ETFs in this space because of the global struggle between the relevant regulators to acknowledge this fund class. It’s still a nascent, young industry.”

Diemers believes that FiCAS is ‘an avant garde type product’. “Eventually there will be cryptocurrency ETFs but for the time being the ETP is as close as it can get to any institutional product.

“The entire crypto world is not that old, maybe 10 years at most, but it remains pretty closed and seen as a risky asset class but we are now on a journey to institutionalisation of the asset class. There will be more steps ahead of us.”

Diemers says that while at the moment no pension fund holds crypto assets, this will change.

The FiCAS product can hold fiat currencies as well as cryptos, and will go long and short, and switch to fiat cash if necessary.

“This is where the founder has proved he has the right feel for the market,” Diemers says. “There was a huge spike in 2017 in cryptocurrencies, an investment bubble in this market with bitcoin up to 20,000 but many lost money as they came in late. Ali Mizani quit on top.”

The product and the asset manager are structured to appeal to retail and institutional investors, with multi-custodians, audit trail and market maker in place.

“We are still a bit coming from a classic banking background, so we have proper due diligence and appropriateness - we need to be sure that the right people are acquiring these products,” Diemers says.

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