Sygnum announces a major addition to its institutional crypto sector indices product portfolio – the Sygnum Crypto Multisector Index Linked Certificate (ILC).
The first institutional Crypto Multisector Index “combines key crypto sectors into a single portfolio to conveniently enable broad, liquid access to the digital asset megatrend.”
It provides exposure to multiple crypto sectors from “a single entry-point, including Layer 1 and 2 protocols, DeFi, Web3 and Gaming and Metaverse.”
It leverages a rules-based approach for maximum transparency.
Exploring crypto investments beyond Layer 1
The Sygnum Crypto Multisector Index Linked Certificate is designed “to give professional and institutional investors broad and intelligent exposure to the digital asset megatrend and expanding decentralised ecosystem. It builds on Layer 1’s foundation blockchain protocols and adds exposure to a diverse set of crypto sectors formulated via a rules-based methodology:”
- Layer 1 – Foundation blockchain protocols like Bitcoin and Ethereum\
- Layer 2 – Protocols that drive Layer 1 performance and scalability like Polygon and Arbitrum
- DeFi – Decentralised versions of traditional financial services like Aave and Uniswap
- Gaming and Metaverse – Blockchain-based games platforms and immersive virtual worlds like Gala and Sandbox
- Web3 – Decentralised internet and applications enabling user data control like Chainlink and COSMOS
Sygnum leveraged its crypto community involvement and regulated digital asset banking experience “to launch the first institutional, rules-based crypto sector indices framework in December 2022.”
The emerging importance of crypto sectors
Sygnum’s Asset Management team tracks and “monitors more than 20,000 crypto protocols. This number is being constantly expanded by innovative new use-cases, significant levels of venture funding and top talent joining the industry. As the numbers of new use cases grow, so does the complexity of analysis and the technical understanding required of investors to make informed market entry and investment decisions.”
A sector-based investment approach “reduces this complexity and provides professional and institutional investors with an advanced toolset to make more informed investment decisions.”
The Sygnum Crypto Multisector Index Linked Certificate analyses and arranges tokens with comparable use cases and value-drivers into “sectors” that have been shown to deliver significant dispersion in terms of performance. The key advantages of a Sygnum index-based sector crypto investment strategy include:
- Relevance – comprehensive coverage of the growing ecosystem across the most established use cases
- Reduced risk – by avoiding exposure to single-token project-related elements
- Increased transparency – full visibility of underlying holdings and daily liquidity
- Simplicity – broad, rules-based digital asset megatrend exposure from a single entry-point
- Trust – leverage the technical and investment experience of a global digital asset banking group
To build the institutional-grade solution, Sygnum partnered with Chartered Investment Partners as “an established provider of structuring services for innovative investment products. Sygnum Bank AG is the key custodian and broker.”