In recent times, the market for cryptocurrencies has undergone widespread changes and developments, and the arrival of two new crypto ETPs is another such revelation. These two new innovative crypto ETPs arrive to join the pack of numerous others that have been launched in the industry. One of the ETPs known as the BTCetc Bitcoin Exchange Traded Crypto (BTCE) is part of a range of innovative ETPs listed on the Deutsche Boerse Xetra and is the first-ever centrally cleared Bitcoin exchange-traded product approved by the Central Clearing Counterparty. The second ETP, which is now available on the leading Swiss stock exchange known as the SIX, is known as the ETPs that are reference physically hosted Ether (ETH). This article examines the introduction of these two cryptocurrency ETPs on the market and how they are expected to impact the industry.
For a while now, the exchange-traded funds (ETFs) for cryptocurrency has seen a significant growth, and the introduction of two new innovative crypto ETPs is making the industry more interesting than ever before. The BTCE, which is now one of the few ETPs approved for investing in Bitcoin has so far proven to be a strong investment in the industry. The product has seen significant growth since it was made available by the European cryptocurrency trading firm, ETC Group. Trading at $25 at the beginning of the year, the BTCE, controlled by the ETC Group, has grown significantly over the past few months and now trades as high as $116, reflecting a growth of over 360% in just a few months of launching.
In many ways, the approval of BTCE as the first-ever central clearing Bitcoin ET product is significant as it adds more credibility to the Bitcoin industry. Moreover, the approval of such a product makes it easy for institutional investors to invest in Bitcoin without incurring additional risks. With institutional investors often looking for a secure and transparent way to invest in cryptocurrencies, ETPs such as BTCE can provide that much-needed level of transparency. The BTCE, which has now been listed on the Deutsche Boerse Xetra, is said to hold Bitcoin securely on behalf of the investor, monitoring the asset and keeping it safe within trading hours.
Besides the introduction of the BTCE, the launch of the ETPs that are reference to physically hosted Ether (ETH) is also a significant milestone in the cryptocurrency industry. The SIX-listed ETP is now the third-largest ETP by assets under management, trailing only to the Bitcoin ETPs from its line of products. The new ETPs that are physically hosted Ether has an expense ratio of 1.49%, and as of May 2021, it had landed at the fourth spot among other Ether-based investment products available in the market. The product, developed by 21Shares has so far secured the support of several significant partners, including Bitcoin Suisse and BitGo.
The SIX-listed ETPs have an in-kind creation/redemption mechanism, making it easy for investors to create new shares and redeem existing shares via a broker or dealer. The in-kind creation feature allows authorized participants and dealers to create new shares on the creation/redemption day by delivering a basket of assets that duplicate the ETPs’ portfolio to the SIX Authorized Participants. On the other hand, dealers can redeem existing shares by delivering a basket of assets that correspond to the share size.
The introduction of these two unique cryptocurrency ETPs is significant as they will enable investors to participate in the cryptocurrency market more quickly, safely, and conveniently. ETPs such as these are becoming popular among institutional investors who are looking for strategies to minimize the risks of investing in cryptocurrencies. Although the value of cryptocurrency ETPs will vary based on market conditions, regulatory changes, and other factors; experienced investors know that ETPs provide a good way to participate in the growth of cryptocurrencies while managing risks and curbing market volatility.
In conclusion, the introduction of the BTCE and ETPs that are physical reference to hosted Ether is a significant milestone in the cryptocurrency industry, and it is expected that more ETPs will be launched in the future. As institutional investors continue to search for transparent ways to invest in cryptocurrencies, ETPs such as these will provide that much-needed transparency. Moreover, ETPs could help to increase the liquidity of the cryptocurrency markets, which could open the door to more new investors looking to go into the market. To maximize the potential of the ETP, investors should work with a financial advisor to find the best investment options for them.
Swiss company Crypto Finance and Swedish index provider Vinter, have joined hands to launch two innovative crypto Exchange Traded Products (ETPs) to provide investors with regulated means of gaining exposure in the cryptocurrency market. The two new crypto ETPs namely VCFMOM and VCFWB3 are based on proprietary investment strategies that utilise blockchain data like price trends, number of active addresses and social media interests to weight assets that are driving web advancements. The collaboration aims to professionalize the emerging digital asset market while providing investors with complex investment strategies that adapt to the ever-changing crypto industry. Financial derivatives such as ETPs offer investors an alternative approach to crypto investing. They enable investors to evade the custody of tokens and entrusting them to a crypto exchange. These crypto products are available on traditional trading platforms that are widely used by investors, allowing them to use derivative financial products. However, crypto purists may not favour such products, but they may be attractive to those who prefer to operate in fully regulated markets.