Invesco, a long-time Bitcoin believer, has launched what it says is the world’s first cryptocurrency exchange traded fund (ETF) on Deutsche Borse. With its launch marking one of the most significant milestones for cryptocurrencies and blockchain projects in general, Invesco will be looking to make waves with institutional investors who are taking an increasing interest to this volatile market.
The “bitcoin etfs” is a new product that allows investors to invest in Bitcoin with an ETF. Invesco has launched the product on Deutsche Borse.
Invesco is introducing a spot Bitcoin (BTC) exchange-traded note (ETN) in Europe, only days after applying for a Bitcoin (BTC) futures exchange-traded fund (ETF) in the United States.
On November 29, Deutsche Boerse, a German stock exchange, said the Invesco Physical Bitcoin ETN will be listed on its digital stock exchange, Xetra. BTIC will be the ticker symbol for the new product.
The new ETN product, which has been admitted to the Frankfurt Stock Exchange’s regulated market, is physically backed by Bitcoin and is centrally cleared by Eurex Clearing. “Investors benefit from greatly reduced risks in transaction settlement via central clearing,” according to the release.
According to ETF Stream, custody of Bitcoin held on behalf of BTIC would be supplied by Standard Chartered’s Zodia crypto custody platform. Northern Trust, a Zodia co-investor, will allegedly serve as BTIC’s administrator. Zodia is a cryptocurrency that was launched in late 2020 and is regulated by the Financial Conduct Authority in the United Kingdom.
CoinShares, a major European digital asset management and long-time Invesco partner, will act as both the index sponsor and execution agent for the new ETN. BTIC tracks the CoinShares Bitcoin Hourly Reference Rate index, which delivers the underlying asset’s price performance minus fees.
The development comes after Invesco withdrew its application with the US Securities and Exchange Commission in October for a Bitcoin futures-based ETF in order to give investors with more alternatives than simply a 100% BTC futures ETF.
“Physical bitcoin is a more transparent market.” One of our concerns was the depth of synthetic liquidity and what it may mean for values over time, which was something we weren’t completely comfortable with,” said Gary Buxton, Invesco’s head of ETFs and indexed strategies. Invesco has been working on the product “since the middle of 2018,” he noted.
VanEck’s Solana and Polkadot ETNs are now available on Deutsche Boerse.
Invesco’s entry into the European crypto exchange-traded product (ETP) market comes as Deutsche Boerse aggressively extends the variety of crypto derivatives products available across its platforms. According to the company, the Xetra exchange provides up to 26 ETNs on various cryptocurrencies, including Bitcoin, Ether (ETH), Bitcoin Cash (BCH), Cardano (ADA), Litecoin (LTC), and others, from seven different suppliers.
ETFs and ETNs, both types of ETPs, are similar in that they follow an underlying asset and trade on exchanges in the same way that other securities do. An ETN is more like a bond, offering exposure to an unsecured debt note issued by an institution, while an ETF assumes ownership in a fund that owns the assets.
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