The first Bitcoin-based ETP arrives in Germany. The full name is Bitcoin Exchange Traded Crypto (BTCE) and is the new product of the London-based ETC Group.
It will be listed on Xetra‘s platform on Deutsche Börse starting this month.
In particular, the Bitcoin-based ETP will be listed on HANetf. Its value will be directly linked to that of Bitcoin.
Choosing the ETP rather than Bitcoin on its own will allow investors to do without the wallet and all the implications such as public or private keys for managing the transaction on the blockchain.
According to the official website, the product will be available on Xetra in six days, starting Tuesday, June 16th.
Why invest in an ETP based on Bitcoin
Apart from the technical features that allow bypassing the customary cryptocurrency trading systems, the Bitcoin ETP offered by ETC Group aims to simplify investments in crypto, while at the same time making them safe and transparent.
The Bitcoin ETP will actually follow the same process as regularly listed shares, including approval by BaFin, the German financial market regulator.
As the CEO of the ETC Group, Bradley Luke, explains:
“The crypto sector has been held back by concerns about complexity, accessibility and governance. With BTCE, we are transporting Bitcoin into the fold of mainstream, regulated financial markets. Investors get the benefits of trading and owning Bitcoin through a regulated security while having the optionality of redeeming Bitcoin if they choose”.
Germany, Bitcoin ETPs and regulation
In reality, this solution is not new in Germany: last February Börse Stuttgart announced that it had listed an ETP based on Bitcoin. This was the 21Shares Short Bitcoin ETP, already listed in Switzerland.
After all, last March BaFin had made it clear that cryptocurrencies can also be financial instruments, effectively approving their trading.
This approval encouraged the launch of special products such as ETPs.
What are ETPs?
ETP is an acronym for Exchange Traded Product. They replicate the value of the underlying asset and hence can never exceed it.
Needless to say, an ETP based on Bitcoin will have the value of Bitcoin. So why choose a listed ETP rather than Bitcoin on an exchange?
For institutional investors, choosing a product on the stock exchange means being in the presence of a regulated market. In addition, the ETP allows for the usual stock market operations, such as leverage, short selling and so on. All this without having to use crypto markets, thereby favouring traditional financial markets.