Luna crash makes ETP emitters sweat

Luna crash makes ETP emitters sweat

In the middle of the course crashes of Terrausd (VAT) and Terra (Luna) In the past few days, ETP emitters have been trying to control their commitments in the latter asset.

Start of the wealth manager 21shares The world's first Terra ETP (Börsen -traded product) in January at Six Swiss Exchange. At the time, CEO Hany Rashwan said in a statement that the company was "very impressed" [The Terra Ecosystem’s] Development and Traction.

But the price of the algorithmic stablecoin VAT has dropped far below the intended binding of $ 1-the local currency of the Terra Blockchain, Luna, which is pursuing the Terra ETP from 21shares, fell in parallel and fell by almost 97 % to 4: 30 a.m.

21Shares ETPS are designed in such a way that they offer a one-to-one exposure with regard to the performance of their underlying assets. If the price of Luna falls to zero, the fund will also fall, a spokesman for 21share told block works.

"Since Luna experiences low prices and high volatility, it is likely that the stock market spreads will continue to expand, which can ultimately lead to delisting on the part of the stock exchanges," said the representative.

21Shares also offers indices such as its Crypto Basket 10 ETP, which tries to reproduce the investment results of an index that is composed of the 10 largest crypto systems after market capitalization. According to a Fact Sheet published on April 4, Terra made 3.68 % of the index. According to the 21shares website, Terra now has a weighting of almost 0 %.

"Our indexed products are specifically intended to offer a diversified commitment in a wide range of cryptos, whereby it is recognized that digital assets, such as traditional assets, can temporarily be subject to considerable volatility and that every investment is inherent in uncertainty," said the representative. "We promise to carefully monitor our products to ensure that they provide the intended commitments and enable investors to engage in a well -diversified commitment in this aspiring and sometimes volatile investment class."

Defi Technologies subsidiary Valor A terra ETP on the Nordic Growth Market (NGM) in February.

Valor CEO Tommy Fransson said that the slump in Terra had triggered “a difficult time” for the industry, and found that ETPs that invest in the asset suffer a blow.

"The rapid drop of price from Terra led to a stop of the entire trade by the [NGM] exchange," he said. "We will continue to observe the situation closely. Our main focus is on the investor and will ensure that he can participate as autonomously as it allows his risk to take risks."

Will Peck, Head of Digital Assets at the Wisdomtree asset manager, noticed that many financial advisors are trying to achieve diversified crypto engagement for their customers. The company has created the RWM Wisdomtree Crypto Index in such a way that the effects of volatility on any crypto asset are minimized, he added, such as: B. Luna.

The index offers access to layer 1 networks, layer-2 protocols, oracle networks, crypto index services, decentralized finances (defi) and the metaverse. Terra had a weighting of 7.5 % in the index on April 22, published on April 22. Luna had a weighting of 0.17 %on Wednesday

"The index methodology and the index committee that monitors the index construction focus on a process that takes into account the applications of cryptoassets and the importance for the crypto ecosystem," said Peck. "Luna is evaluated together with broader cryptoma market events and other cryptoassets in this context what is an ongoing process."

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The contribution "Luna Crash lets ETP emitters sweat" is not a financial advice.