Amun launches the token that plots the inverse of the price of Bitcoin

A new token allows traders to make money every time the bitcoin price drops.

Swiss fintech firm Amun launched its daily reverse token BTCSHORT (BTCS) on Wednesday, which returns gains based on the reverse price movements of bitcoin (BTC) over a given 24-hour period. The product complements a recent exchange-traded bitcoin (ETP) product released by Amun in January and now overseen by sister company 21Shares after a March rebranding.

“Typically, these purchases are short-term in nature, usually on a daily basis, as the holder aims to move quickly to take advantage of a short-term drop in bitcoin for a positive return,” the company said in an announcement. .

Designed as a stablecoin, BTCS is built on Ethereum’s ERC-20 token standard, which means it is as easy to purchase as any other token and will be available on secondary markets starting with Liquid, HitBTC and Bitcoin.com, Hany Rashwan, CEO by Amun and 21Shares, he told CoinDesk in an interview.

“The demand for these levers and reverse tokens is huge,” Rashwan said. “Users want the ability to purchase these types of products more easily and safely.”

Rashwan said BTCS was created specifically for traders of all types – from retail to institutional. Additionally, the token was released prior to bitcoin’s halving on May 11 to allow traders to protect themselves from potential volatility, Amun said.

Learn More: Bitcoin Halving, Explained

The token was designed according to the practices and standards developed by 21Shares, Rashwan said. The company currently lists 11 ETPs on multiple European exchanges, including SIX Swiss.

For compliance reasons, BTCS minting and burning is done on the Amun platform in exchange for the dollar-backed USDC stablecoin and remains off-limits to US and Swiss investors, along with internationally sanctioned nations.

Rashwan said Amun will launch similar reverse tokens, including one for the second largest cryptocurrency by market cap, ether (ETH), in the coming weeks.

With BTCS, the company is primarily targeting the risk-averse side of the cryptocurrency market, investors who prefer to trade regulatory compliant products, Rashwan said.

“Regulations are important and it’s just astounding to me how contrarian is now,” he said.

Alternative derivatives markets such as BitMEX, Binance, and FTX are often found on the other side of the moat. For example, BitMEX and FTX operate outside the lightly regulated Seychelles, Antigua and Barbuda respectively, while Binance CEO Changpeng “CZ” Zhao often reminds his Twitter followers of decentralized work environment and is a bit confused as to where the company is based.

Either way, the new products are chasing the money flowing into crypto derivatives platforms, which Rashwan said is likely to overtake spot cryptocurrency trading in the near future.

A new product that perhaps best highlights this innovation would be FTX’s BVOL financial instrument (s), which made its debut late last month.

(i) BVOL comes in both long and inverse forms – hence (i) – and generally “tracks implied market volatility,” said Sam Bankman-Fried, CEO of FTX and Alameda Research in an email. .

Like the BTCS token, the BVOL token (s) is built on the ERC-20 standard and on a separate internal contract called MOVE which offers “traders the ability to buy and sell the volatility of bitcoin over different time periods on margin”, Bankman- Fried said.

Notably, these tokens free traders from margin maintenance, which is known to be a sticky problem in crypto derivatives trading.

Tokens from FTX and Amun perhaps suggest that ERC-20-based wrapped derivatives are a good solution for retail users who may struggle with complex derivatives.

Rashwan pointed to the March delisting of a different set of FTX tokens from Binance’s derivatives platform as a salient example for Amun. As reported by CoinDesk, Binance’s CZ removed the BULL and BEAR leverage tokens from its platform, claiming that “users don’t understand” the products and therefore were suffering unrealized losses.

See Also: CFTC Approves Bitnomial To Offer Real Bitcoin Settled Futures Contracts

For Rashwan, simplicity sells. “Financially I am quite educated and it is not always clear what I am buying with these products. If you’re buying actual futures, you have to manage your margin and collateral and worry about liquidations, “he said.” It’s a whole host of things if all you want to do is just bet on the price going up or the price going down. “