Now that institutional investors have settled into the cryptocurrency sphere, an increasing number of sophisticated investment products are being introduced in the market for their specific needs. In the absence of a legitimate market in the U.S due to regulatory red-taping, asset managers are focusing on the European front. Especially since investors just can’t get enough of cryptocurrency-backed exchange-traded products (ETP) on the continent.
Earlier today, a suite of crypto-basket ETPs was launched by asset manager WisdomTree on the Swiss stock exchange SIX and Frankfurt-based Börse Xetra. This was accompanied by Invesco also entering the European ETP market through its spot Bitcoin ETP, which has also been listed on the Deutsche Börse.
WisdomTree’s trio of ETPs tracks proprietary indices developed by the company and are called WisdomTree Crypto Market (BLOC), WisdomTree Crypto Altcoins (WALT), and WisdomTree Crypto Mega Cap Equal Weight (MEGA).
BLOC is meant for investors wanting a broad exposure to the crypto-market, with the fund tracking established digital assets that encompass 70% of the industry’s total market cap. These include the top tokens Bitcoin and Ethereum (ETH), along with leading altcoins Litecoin, Bitcoin Cash, Cardano (ADA), Solana (SOL), and Polkadot (DOT).
On the contrary, those looking for altcoin exposure can opt for WALT. It tracks all the aforementioned, except BTC and ETH.
As the name suggests, the last fund is designed for those especially interested in only the top players in the market. The MEGA fund gives 50% weightage each to both mega-cap cryptocurrencies, Bitcoin and Ethereum. With a total expense ratio of 0.95%, MEGA is the lowest-priced physically replicated cryptocurrency basket ETP in Europe, according to the company.
The funds can trade on exchanges in all 12 European Union nations, along with Switzerland and Norway.
As for Invesco’s Physical Bitcoin ETP (BTIC), it is a physically-backed ETF that will track the CoinShares Bitcoin Hourly Reference Rate index. It should be noted that Invesco had dropped its filing for a Bitcoin Futures ETF in the USA very recently. At the time, it blamed the country’s regulators for imposing unnecessary hurdles.
Recent reports have also claimed that other asset management giants in the continent such as Fidelity and UBS are also going to follow Invesco’s footsteps. Especially since assets in European ETPs and mutual funds with cryptocurrency exposure top $11 billion.
According to MorningStar data, European crypto-funds generated an average return of 461.7% over 12 months to the end of October and an annualized return of 116.3% over three years.
The same report also found that crypto-backed ETPS have been faring far better than those backed by traditional assets. Not a single one could beat crypto-products to the top-20 in European markets last month.
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