Specialist provider of digital asset-backed securities ETC Group is listing an exchanged traded product (ETP) that tracks the price of Ethereum's Ether cryptocurrency on Deutsche Börse’s XETRA.
This is the first time an Ethereum ETP will be listed on the platform.
The ETHetc – ETC Group Physical Ethereum ETC (ticker: ZETH) aims to provide investors with a secure and liquid way to gain exposure to the cryptocurrency. It is structured as an asset-backed debt security issued in Germany, and will be marketed and distributed across Europe by independent provider HANetf. It has a management fee of 1.49 percent.
The announcement follows the launch of ETC Group’s first product, the BTCetc Bitcoin Exchange Traded Crypto (ticker BTCE), which was the first cryptocurrency product to launch on XETRA last June. Since then, it has seen its assets under management grow to over $1 billion in seven months. It was the most traded product on the exchange’s ETN segment in the second half of 2020, displacing Xetra Gold.
ZETH will be central counterparty cleared. Typically, central clearing is absent in underlying crypto currency markets but it is a feature that investors expect when trading an ETP on a regulated exchange, as it reduces counterparty risk when trading.
ETC Group and HANetf believe that ETCs provide investors with several benefits over investing directly in the cryptocurrencies they track. Traded on regulated markets, investors can buy and sell the ETCs in the same way they would when trading conventional shares, with the identical regulatory protections in place.
Explaining the thought process behind the new product Bradley Duke, chief executive officer of ETC Group said: “We have worked really hard to engineer our physically backed Bitcoin ETC (BTCE) to offer investors a safer and more transparent way to gain exposure to Bitcoin and we are now able to offer the same benefits to Ethereum with the listing of ETC Group Physical Ethereum ETC (ZETH). Institutional investors are demanding regulated crypto products that are secure, liquid and central counterparty cleared and ETC Group is building products that adhere to the complex and exacting standards of the institutional investor.”
Forecasting the future, he concluded: “Ethereum and Bitcoin have increased by 430 percent and 530 percent respectively in the last 12 months, and we expect valuations to continue to rise over the long term. Traditional markets will remain volatile for some time, fuelling demand for alternatives such as cryptocurrencies. In contrast to previous rallies in cryptocurrencies, the current one is the first to be supported by both retail and institutional investors, making this the ideal time to launch ZETH”
Hector McNeil, co-founder and co-chief executive officer at HANetf, added: “We are proud to be supporting ETC Group in the listing of ETC Group Physical Ethereum ETC. ETC Group is clearly at the forefront of offering market leading investment products focusing on cryptocurrencies.”
