Large-cap Tokens and DeFi Lead Crypto Rally
Digital assets prices rallied in July, with Bitcoin up 19% and Ethereum up 58%. Among the crypto sectors we track, DeFi was the best-performing sector.
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ISIN: DE000A3GWNC2
Risk of a FTX Token ETN: You may lose money up to the total loss of your investment due to the extreme volatility of this asset class and the Main Risk Factors described below and additional risks described in the sales prospectus.
FTX is a cryptocurrency derivatives exchange launched in April, 2019 that offers futures and leveraged tokens on both individual and baskets of digital assets, over-the-counter (OTC) trading, and binary options.
It is backed by Alameda Research, a quantitative cryptocurrency trading firm that provides liquidity in cryptocurrency and digital assets markets for between $600 million and $1 billion of volume a day.
The FTX Token (FTT) is the native token designed for the cryptocurrency derivatives exchange FTX. FTX was designed to prevent clawbacks using a three-tiered liquidation model that closes positions with rate-limited orders and leverages an insurance fund to prevent customer losses.
FTX was built with a lot of features to differentiate the firm from its competitors, of which its biggest assets are described below:
FTT is the native cryptocurrency of FTX. It was designed to be the backbone for the FTX Exchange and drive it forward.
Clients are typically more institutional than the average exchange, but they cater to all customers.
There’s an even split between customers in East Asia and the West. Separately, FTX launched a decentralized exchange, Serum, which is independent from the FTX ecosystem.
FTX is one of the fastest moving exchanges, quickly creating a name for itself by adding new features at an unprecedented pace.
They have created innovative new products like basket trades, leveraged tokens, prediction markets, and fractionalized stock trading. It has also grown to be a major venue for futures trading
The VanEck FTX Token ETN is based on the performance of the MVIS® CryptoCompare FTX Token VWAP Close Index.
| 1 Month | 3 Months | YTD | 1 Year |
3 Years (annualised) |
5 Years (annualised) |
|
| MVIS CryptoCompare FTX Token VWAP Close Index | 33.31% | -19.80% | -22.00% | -9.69% | — | — |
Figures in the table as of 31 July 2022. Periods greater than one year are annualised. Source: VanEck, MVIS. The performance quoted represents past performance which is not a reliable indicator of future results. Future performance may be lower or higher than current performance. Investment returns will fluctuate so that investors' shares, when redeemed, may be worth more or less than their original cost.
Source: VanEck, MVIS. The performance quoted represents past performance which is not a reliable indicator of future results. Future performance may be lower or higher than current performance. Investment returns will fluctuate so that investors' shares, when redeemed, may be worth more or less than their original cost.
ISIN: DE000A3GWNC2
Lower risk: Typically lower reward
Higher risk: Typically higher reward
Despite all the hype, digital assets are a highly risky investment. Below are key risk factors that need to be considered before making an investment in a FTX Token ETN.
The trading prices of many digital assets have experienced extreme volatility in recent periods and may well continue to do so. Digital assets were only introduced within the past decade and regulatory clarity remains elusive in many jurisdictions. Digital assets' value depends on such regulation remaining favorable, as well with the technological capabilities, the development of protocol networks, competition from other digital asset networks and from forks. Volatility can be strongly amplified by transactions from speculative investors, hedge funds and other large investors. You may experience losses if you need to sell your Shares at a time when the price of the underlying digital asset is lower than it was when you made your prior investment. Even if you are able to hold Shares for the long-term, your Shares may never generate a profit.
If the currency of the Product differs from the currency you invest in, your final return depends on the exchange rate between your investment currency and the currency of the Product. That is one of the factors to take into account when considering an investment in FTX Token ETN.
Trading venues and systems used by market participants to trade FTT may be subject to hacking and could result in loss of FTT.
Investors can lose all invested capital. The Product does not include capital protection against market risk. At the end of the term the issuer may not be able to pay the final redemption amount. This is another factor to consider before making an investment in FTX Token ETN.
For more information on risks, please see the “Risk Factors” section of the relevant ETN’s prospectus, available on www.vaneck.com.
Digital assets prices rallied in July, with Bitcoin up 19% and Ethereum up 58%. Among the crypto sectors we track, DeFi was the best-performing sector.
Read Blog