Bitcoin ETP (BTCE) Surpasses $100 Million AUM in Just Four Months
ETC Group’s Bitcoin ETP (BTCE) has surpassed $100 million AUM since its launch on the Deutsche Börse Xetra in little over four months.
The 100% physically backed Bitcoin ETP provides investors with regulated access to Bitcoin, and has become the first Bitcoin exchange-traded product to reach the $100 million mark.
The Deutsche Börse Xetra-listed ETP has reached the milestone after an extremely bullish quarter for Bitcoin, which has seen the leading cryptocurrency rise more than 50%. At time of writing, the Bitcoin price is at $15,334.
It’s not just the rise of the Bitcoin price that has helped BTCE’s value rise, however. There is strong investor demand for the Bitcoin ETP, which has seen a $6 million inflows in the last two days, according to ETF Strategy.
ETC Group collaborated with London-based white-label ETP Platform, HANetf to launch BTCE on Frankfurt’s Deutsche Börse Xetra regulated. The Bitcoin ETP is 100% backed by actual BTC and tracks the Bitcoin price of the leading cryptocurrency.
Bitcoin ETP (BTCE) Could Clear Way For Large Institutional Investment
ETC Group CEO, Bradley Duke, said it was clear that institutional investors ‘recognized the quality of BTCE’s investor protections’ and the outcome of the success of BTCE had seen over ‘1 million shares of BTCE being traded in a single day’ on Germany’s biggest regulated exchange.
ETC Group and HANetf both believe the attraction to the Bitcoin ETP is that it takes away the necessity to self-custody, and potentially clears the way for institutional investment.
A key feature of BTCE is that investors benefit from investor protections through central counterparty clearing, a world’s first for any Bitcoin ETP.
This is highly significant as central counterparty clearing could open the door to institutional investors. Typically, institutional investors cannot trade non-centrally-cleared instruments, something standing in the way of direct transactions in Bitcoin itself.
The BTCE also offers a backdoor way in to owning actual Bitcoin. Any investor buying the Bitcoin ETP on the regulated exchange has the ‘ability to redeem BTCE for actual Bitcoin,’ according to CEO, Bradley Duke.
‘We worked really hard to engineer a product that provides investors with a safer and more transparent way to gain exposure to Bitcoin,’ said Duke. … ‘Investors also like the optionality of being able to redeem BTCE for actual bitcoin if they so choose.’
First Retail, Now Institutions
In its only four month existence the BTCE has grown from a retail only, speculative investment to something the bigger institutional investors are keen to get hold of.
According to HANetf CEO, Hector McNeil the Bitcoin ETP is starting to attract interest from private banks, wealth managers and mutual funds.
‘Initially, demand was mainly from the retail space, private investors and the like,’ said McNeil. ‘However, over the last few weeks we have seen a marked uptick in interest from professional investors, most notably private banks and wealth managers but also increasingly institutionally managed UCITS money.’
Europe Leads The Way
Europe is clearly leading the way with Bitcoin exchange-traded products, and it’s not only the BTCE that is traded on Europe’s top regulated exchanges.
The Vienna Stock Exchange (Wiener Boerse) listed both Bitcoin and Ethereum ETPs on its regulated market for the first time in September this year.
Cryptocurrency ETP issuer 21Shares listed its Bitcoin exchange-traded product (ABTC) on the Deutsche Boerse in February, after a successful launch on the Swiss SIX Exchange the previous year.
And Swiss crypto asset manager Amun listed all seven of its cryptocurrency ETPs on the Boerse Stuttgart late last year. These were already listed on Swiss SIX Exchange, but now invetsors can get hold of them in Swiss Francs, USD, and Euros.
Regulated Investment Products Are Helping Boost The Bitcoin Price
The growing number of Bitcoin ETPs and other investment funds like Grayscale’s GBTC is undoubtedly helping to boost the Bitcoin price.
Many large and institutional investors are finally waking up to the fact that Bitcoin is hard money. Whether it’s been hurried along with Covid 19, the big investors now see Bitcoin as a safe haven from the printing presses of the global central banks.
But many regulated investment firms can’t buy Bitcoin, and most wouldn’t want to self-custody it. And that’s where Bitcoin ETPs and the like come in.
While many Bitcoin purists argue for self-custody, the truth is most investors aren’t interested in that. And these Bitcoin ETPs and funds are backed by actual Bitcoin, so the more popular they get, the number goes up.
As The Fed, The Bank of England and The European Central Bank print their currencies into oblivion, we need as many avenues open as possible to gain Bitcoin exposure.
The big money will outsource the perils of Bitcoin self custody to other regulated firms. We Bitcoiners just have to sit tight, hodl, and reap the benefits.
