A UK-based financial services company will list a centrally cleared bitcoin exchange-traded product (ETP) on Deutsche Börse’s Xetra electronic trading market later this month.
In a statement released on June 9, Etc Group said the contract, known as Bitcoin Exchange Traded Crypto (BTCE), tracks the price of BTC and is 100% physically backed by the cryptocurrency.
One BTCE is equivalent to 0.001 bitcoin, less fees, it said, allowing the holder of each unit of the derivative a claim on a specific amount of bitcoin.
Redeemable in either BTC or cash, the ETP will be distributed and marketed on a platform operated by Hanetf, a European Union-approved private issuer of exchange traded funds.
“With BTCE, we are transporting bitcoin into the fold of mainstream, regulated financial markets,” Bradley Duke, chief executive officer of Etc Group, said in the statement, without giving a date on the planned listing.
“Investors get the benefits of trading and owning bitcoin through a regulated security while having the optionality of redeeming bitcoin if they choose,” he added.
German’s Federal Financial Supervisory Authority (BaFin) approved BTCE in March, according to the firm. It says that for every unit of the ETP, “there is bitcoin stored in regulated, institutional-grade safe” – identified as the Bitgo Trust Company.
Securities brokers or banks assume custody of BTCE bought through their desks on behalf of investors. The company claims that its new product will be able to draw liquidity from “many fragmented crypto exchanges” because of its centralized nature.
“BTCE…is supported by a network of world-class Authorised Participants (APs) and Market Makers experienced in cryptocurrency markets as well as the ETP markets. The APs ensure on-exchange liquidity and tight spreads, enabling traders to purchase in all sizes without having to worry about market impact,” explained the firm.
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