Let’s analyze some of the best ETP products that invest in Solana. Who will win in comparison?
In recent months, Solana, one of the most promising and innovative cryptocurrencies, has attracted the attention of investors around the world. Many investors seek to capitalize on this growing popularity, but how can they do so effectively and efficiently? In this article, we will look at two products that offer exposure to Solana: the CoinShares FTX PhysicalStaked Solana ETN and the 21Shares Solana ETP. However, as always, there are pros and cons to consider. Let’s see them together!
21Shares Solana ETP: the advantages of the ETF
1. Exposure to Solana: The 21Shares Solana ETP offers a relatively accessible way to invest in Solana, one of the fastest-growing cryptocurrencies with great potential. Investors can benefit from Solana’s performance without having to purchase the cryptocurrency directly.
2. Fund size: Although it is considered a not-too-large ETN, the fact that it has assets under management of 28 million euros suggests greater liquidity compared to other competitors. This could make the ETN more attractive to investors who want a not-too-small managed size.
3. Positive performance in the short term. In the short term, the ETN has recorded YTD (year-to-date) returns of +155.98%, with positive results in the 1-month, 3-month, and 6-month periods.
21Shares Solana ETP: the disadvantages of the ETF
1. High costs: The total expense ratio (TER) of 2.50% per year is significantly high. This places a heavy burden on investors and could erode potential returns over time. Investors should be aware of this and consider whether the cost is justified by the expected performance.
2. High Volatility: The annual volatility of 114.63% indicates that the ETN is subject to significant fluctuations in value over the course of the year. This may not be suitable for those seeking low-risk investments or who are unwilling to tolerate large price swings.
3. 1-Year Negative Performance: Despite positive short-term results, the ETN has recorded a negative performance of -35.83% over the past year. This could alarm investors who value steady, long-term growth in their investments.
4. Maximum significant drawdown: A maximum 1-year drawdown of -75.20% indicates that the value of the ETN has suffered a considerable loss compared to its maximum value reached in the last year. This underlines the high risk associated with investing in this product.
ETNCoinShares FTX Physical Staked Solana. The advantages
1. Extremely low costs: One of the main advantages of the CoinShares FTX PhysicalStaked Solana ETN is its zero TER (Total Expense Ratio). This means investors don’t have to worry about annual fees being taken out of their investments, making it a very economical choice.
2. Physical Replication: The ETN replicates the performance of the Solana Index through a physical replication structure. This means that the value of the product is directly linked to the physical holding of cryptocurrency, providing greater transparency and reliability in the replication of the underlying index.
3. Recent Positive Results: Despite the volatility of the cryptocurrency market, the CoinShares FTX PhysicalStaked Solana ETN has seen positive results in the short term. The 1-month, 3-month, and 6-month returns are all in positive territory, with a notable YTD (year-to-date) return of +165.93%.
4. Size managed: Despite being relatively small in size with assets under management of 21 million Euros, the ETN has proven to be efficient in replicating the performance of the underlying.
ETNCoinShares FTX Physical Staked Solana. The disadvantages
1. High volatility: The annual volatility of the ETN, measured in Euros, was 126.73%. This means that investors may face significant fluctuations in the value of the ETN over the course of the year. This may not be suitable for those looking for low-risk investments.
2. High Maximum Drawdown: The ETN recorded a 1-year maximum drawdown of -75.14%. This indicates that over a 12-month period, the ETN has suffered a significant loss in value compared to its highest value achieved in that period. Investors should be prepared to endure this volatility and possible losses.
3. Negative 1-year performance: Despite positive short-term results, the ETN has recorded a negative performance of -33.15% over the past year. This could worry long-term investors looking for a stable return over time.
Who wins the comparison?
In the comparison between the CoinShares FTX PhysicalStaked Solana ETN and the 21Shares Solana ETP, some significant differences emerge that help evaluate which is the best choice for investors.
The CoinShares ETN stands out for its much lower costs, with a TER (Annual Expense Rate) of 0.00%, while the 21Shares ETP has a TER of 2.50%. This means investors in the CoinShares ETN don’t have to worry about annual fees eroding their potential returns. The difference in costs is a key factor to consider, especially for long-term investors.
Looking at performance, both products have performed poorly over the past year, but the CoinShares ETN appears to have suffered a smaller loss than the 21Shares ETP. Past performance is not a guarantee of future performance, but it is still an important indicator to take into consideration.
Volatility is another area of comparison. Both instruments feature significant volatility, but the CoinShares ETN has a slightly higher 1-year volatility (126.73%) than the 21Shares ETP (114.63%). Lower volatility can be seen as an advantage for investors who prefer to avoid extreme fluctuations in the values of their investments. Finally, the fund size is similar, with the CoinShares ETN having assets under management of EUR 21 million and the 21Shares ETP having EUR 28 million. Both are considered relatively small products, but the CoinShares ETN is still competitive in this aspect.
In conclusion, based on the information provided, the CoinShares FTX PhysicalStaked Solana ETN appears to offer a more attractive overall solution for investors. With lower costs, slightly better recent performance, and a competitive fund size, it could be the preferred choice for those looking for exposure to Solana. However, as always, investors should carefully consider their risk profile and needs before making an investment decision.
Original article published on Money.it Italy 2023-10-09 06:18:00. Original title: Gli ETF su Solana volano dall’inizio del 2023: + 160%
