21Shares sees extraordinary growth through Binance and adds new products
The appreciation of bitcoin and the successful IPO of Coinbase lie behind the rapid growth of assets at Swiss-based crypto specialists, 21 Shares, says managing director, Laurent Kssis (pictured). “It’s helped tremendously as a recognition that cryptocurrencies are here to stay, he says. “It has wider reaching consequences for the market place.”
Earlier this month, Algo-Chain's Allan Lane commented on the extraordinary growth of 21 Share’s Binance ETP, up over 1,000 per cent year to date at the time.
Kssis notes that Coinbase was valued at USD100 billion but that is one fifth of what the Binance exchange does worldwide. Binance’s business model is to issue a token that reflects an actual appreciation of the company’s revenues.
“You participate in the growth of Binance’s performance and it is a very profitable and successful company but every quarter, depending on their revenues, they burn a special amount of tokens to reduce the supply in the market to aid the appreciation of the price of the token – the fewer in supply, the more the demand,” Kssis says.
21 Shares has seen its assets increase to USD1.5 billion across 12 products, and the biggest product is Binance which represents some USD600 million.
“We had a relationship with Binance and they were keen on pushing a financial product using their own token,” Kssis says. “Our business model is to list cryptocurrencies that are difficult to buy or access.”
The firm is launching two new single asset ETPS with the world’s first Stellar XLM ETP (AXLM) and Cardano ADA ETP (AADA) on the regulated market of the Swiss stock exchange (SIX Exchange).
The firm explains that during the last rebalancing review, Stellar was admitted by the Index Provider (MVIS - HODL5) to the 21Shares HODL basket ETP as fourth constituent after Bitcoin Cash (BCH) and XRP were removed.
21Shares has also undergone a stock split for 10 of its ETPs, the first of its kind in crypto ETPs, according to the firm.
The event was triggered to broaden the accessibility by employing forward share splits of the majority of its ETPs for which the underlying cryptoassets have rallied by more than 50 per cent in the last four months.
Employing a stock split enables the firm to keep the ETPs trading at prices within efficient and accessible ranges.
“The simple reason is to bring back efficient pricing to our products,” Kssis says. “The prices have rocketed so much, it’s a statement of our products to the markets, a homage to us, showing we selected the right products and how well they have evolved and we have only been doing this for two years.”
Kssis says that the firm focuses on institutional investment, looking for institutional investors who have within their mandate a requirement to allocate 0.5 to 5 per cent to alternative assets, which can include cryptocurrencies, to enhance their Sharpe ratio.
“Conventional tier one and tier two asset managers can’t buy the underlying cryptocurrency assets directly as it would not fit with their compliance or custodian requirements. The investors are very comfortable with our structures.”
Kssis has been in the cryptocurrency space for seven years and has gone from finding everyone laughing at the sector, to, what he describes as a new world, where you can no longer discount cryptocurrency assets as investments.
“I am very positive,” he says. “There are a lot of controversies in the market, lots of issues that need to be addressed but it is encouraging that the industry is moving in the right direction, wanting regulation and support from the authorities and structures that the financial markets are used to.”