The world’s leading digital currency Bitcoin is making another milestone in cryptocurrency history as it will be the first crypto asset listed as an Exchange Traded Product (ETP).
The UK-based financial company ETC Group will be listing Bitcoin as a Centrally Cleared Exchange Traded Product (ETP) on Deutsche Börse Xetra platform later this month. This is big news for Bitcoin as it will become the first cryptocurrency product listed on one of the largest exchanges in Europe.
According to the official statement, Bitcoin ETP is scheduled to be listed on the German stock exchange at the end of June as it already received the approval from BaFin, the financial regulatory authority for Germany. BaFin officially recognized cryptocurrencies as financial instruments in March 2020.
The first centrally cleared Bitcoin ETP
The product called Bitcoin Exchange Traded Crypto (BTCE) will be the world’s first centrally cleared Bitcoin ETP. It will track the price of Bitcoin and will be 100% physically backed by the biggest crypto asset by market cap. One BTCE will come at the denomination of 0.001 Bitcoin.
Exchange traded product (ETP) is a financial instrument whose value is based on the underlying security (like stocks, bonds, currencies) and is traded on stock exchanges. Additionally, the central clearing procedure allows to maintain stability and reduce the counterparty risk when trading BTCE.
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According to the announcement, the BTCE is a hybrid ETP product which has the same features as an ETF (exchange traded fund). However, since it is a financial instrument of a single asset, it does not qualify with the European fund rules to be defined as an ETF.
Reportedly, for every unit of BTCE there will be a predefined amount of Bitcoin stored in regulated, institutional-grade custody of BitGo. The whole structure of ETP is based on a transparent and verifiable process and allows the option for redemption in Bitcoin.
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As told Bradley Duke, CEO of ETC Group, the BTCE will open the ability of wider adoption for the world’s dominant crypto which is good news for Bitcoin:
BTCE brings transparency and investor protection that regulators and institutional investors require to the world of Bitcoin. [...] With BTCE, we are transporting Bitcoin into the fold of mainstream, regulated financial markets.
He also highlighted that BTCE allows investors to get the benefits of trading and owning Bitcoin through regulated security. When trading on regulated markets, investors can buy and sell the BTCE in the same way they trade traditional stocks under the regulatory protection.
he centrally cleared BTCE currently will be tradable in Germany only. The ETC Group however claimed that it’s further extension to Austria, Italy, and the UK is also planned.
