London’s ETC Investment Group will list its new bitcoin exchange-traded product (ETP) on the Frankfurt-based Deutsche Borse’s Xetra electronic trading market. Shares of the new product will be open to traders in the United Kingdom, Austria, and Italy.
The firm announced via a press release on ETF Stream on June 9, 2020, that its ETP called the Bitcoin Exchange Traded Crypto (BTCE) will premier the world of centrally cleared derivative crypto assets. They shall distribute and market it through HANetf’s issuance business.
Transport Bitcoin into the Mainstream
The product will launch later this month once it receives a green light from German financial regulators. Commenting, ETC Group CEO Bradley Duke stated that concerns about complexity, accessibility, and governance had held the crypto sector back . He added:
“With BTCE, we are transporting bitcoin into the fold of mainstream, regulated financial markets. Investors get the benefits of trading and owning bitcoin through regulated security while having the optionality of redeeming bitcoin if they choose.”
Central clearing is a system the European derivative market operates to boost stability as it ensures the financial institutions involved have a counterparty credit risk. Since the security is also backed by bitcoin, every investor has a claim to a precise amount of cryptocurrency. The company announced that it would store its physical bitcoin in a cold vault (not connected to the internet) operated by California-based Custodian BitGo.
Traded on a Regulated Market
As per the press release, investors opting for BTCE will have an advantage over those that invest directly in bitcoin. Since they will be able to trade the product on regulated markets, investors can buy and sell BTCE just as they would the traditional shares or ETPs. The investors’ assets will remain safeguarded through the government’s regulatory bodies.
This development comes on the heels of German Financial Authority BaFin’s announcement last March to finally recognize cryptocurrencies as financial instruments. There is growing hope among cryptocurrency diehards of bitcoin becoming the alternative currency during the ongoing Covid-19 crisis. Bitcoin is now rallying along with the competition to trail the blaze out of the lockdown.
Recaptured a Good Position
The biggest hurdle so far has been the lack of exposure to bitcoin via the stock market. A possible solution is Grayscale Bitcoin Trust (GBTC), which, as its name implies, owns and tracks Bitcoin. The GBTC stock hit a 52-week low during the coronavirus crash. It has now recaptured a good portion of its losses and entered the buy zone once more. The GBTC stock has clawed its way back toward last year’s highs; almost hitting 13.69 on Feb. 12 and peaking in late June peak at 17.40.
By licensing cryptocurrency financial products, Germany will be cementing its position among the most pro-crypto nations in Europe. This follows a move in early May by the Croatian financial regulator Hanfa to approve the country’s first Bitcoin investment fund.