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- The investment firm ETC Group plans to launch a Bitcoin-based security on the German stock exchange later this month.
- The Bitcoin Exchange Traded Crypto (BTCE) will be backed by “real Bitcoin” so that investors can pay out their shares in BTC.
The adaptation of Bitcoin is progressing daily as more and more companies accept BTC as a means of payment, thereby increasing the spread of BTC. For investors who want to invest in Bitcoin but do not want to deal with the technical challenges, there will be a new promising opportunity later this month.
Deutsche Börse launches Bitcoin Exchange Traded Crypto
London-based ETC Group announced yesterday that it is launching a new exchange-traded product called Bitcoin Exchange Traded Crypto (BTCE). The BTCE is the world’s first centrally cleared crypto asset and will be listed on the Xetra market of the German stock exchange. In the European foreign exchange market, central clearing is used to strengthen the stability of trading by ensuring that a financial institution, in this case the Deutsche Börse subsidiary Eurex, assumes the credit risk of the counterparty.
The ETC Group states that its new product is backed by “real Bitcoin”, allowing investors to have profits paid out in Bitcoin. Bradley Duke, CEO of ETC Group, describes how their new product makes it easier for institutional investors to enter the crypto market because they do not have to deal with the technical challenges:
BTCE brings the transparency and investor protection that regulators and institutional investors require to the Bitcoin world. Each BTCE unit entitles the holder to a predefined Bitcoin amount. When sold, the units can optionally be paid out in Bitcoin.
According to the current status, the final specifications are still being clarified, but many signals from the German stock exchange indicate that the BTCE can start next week. The BTCE is a hybrid ETP product and has the same features as an ETF (exchange traded product). However, according to the ETC Group, BTCE has only one asset, so it cannot be declared an ETF under the European fund regime.
The costs are also somewhat higher in direct comparison to classic ETFs. The total expense ratio (also known as TER) is just under 2% compared to conventional ETFs, where this figure is between 0.1% and 0.7%. The Bitcoin-based security will initially be tradable in Germany, but further expansion into Austria, Italy and the UK is planned. As a result, users in these countries will be able to hold and trade BTCE shares.
Bitcoin price still caught in sideways trend
The Bitcoin price has been trapped in a price range between $9,600 and $9,900 for several days and has not found any momentum to break out upwards. At the time of writing, the price has risen 0.86% within the last 24 hours to $9,771.08. The market capitalization has increased slightly to $179.5 billion. Even though analysts are bullish about Bitcoin, it remains to be seen in which direction BTC will move.
