Token that Pays Investors when BTC Prices Fall launched by Swiss Startup
The new token allows traders to gain from any downside price movements of Bitcoin potentially allowing investors to create effective hedges against BTC’s price
Swiss-based startup, Amun, has launched BTCS, which will reward its holders whenever the price of BTC falls over a 24-hour window.
In a statement released Wednesday, the fintech said that its BTCSHORT (BTCS) is a daily token premised on reverse price movements of Bitcoin.
Those interested in making daily gains from falls in the price of Bitcoin (BTC) can do so via daily purchases. The firm said in its statement that the “short term nature” of the tokens is down to the fact that holders may want to “move in quickly to leverage a near-term decline in Bitcoin to make a positive return.”
In an interview with crypto publication Coindesk, Amun CEO Hany Rashwan said that there is a “tremendous” demand in the market for tokens such as BTCSHORTS.
“The users want the ability to buy these kinds of products in an easier and safer way,” he added.
According to the firm, BTCS will be available for purchase on HitBTC, Liquid, and Bitcoin.com marketplaces.
Any trader, whether retail or institutional, can leverage BTCS and according to Amun, its release is timely given that it launches days before the Bitcoin halving. This means that traders worried about a potential downtrend can use the token as a hedge against volatility.
The platform will mint the tokens and conduct BTCS token burns to have tighter control over circulation and volume. The token burns will be in exchange for USD Coin, a US dollar-backed stablecoin. Traders in the U.S, Switzerland, and those countries facing international sanctions will not access BTCS.
BTCSHORTS (BTCS) arrives following a similar product Amun launched in January this year. The firm announced an exchange-traded product (ETP) that also tracks downsides in Bitcoin’s price, which it launched on German stock exchange, Boerse Stuttgart.
The SBTC token targeted Europe-based investors and is currently run by 21Shares. Amun says it’s also looking to launch an inverse token for Ethereum (ETH).
As Bitcoin’s halving approaches, the asset’s value has stalled to around $9,000 after resistance was found in its surge to $9,500.
As of press time, the top crypto by market cap is posting gains of 4.63%, with bulls looking to push prices higher.