Team behind $1bn bitcoin ETP follows up with Ethereum product | ETF Strategy
ETC Group, the outfit behind BTCE, has rolled out its second digital asset ETP.
Listed on Xetra, the ETHetc – ETC Group Physical Ethereum ETC (ZETH GY) provides exposure to Ether, the second-largest cryptocurrency by market capitalization, after Bitcoin.
Ether is the native cryptocurrency of the Ethereum blockchain platform.
ZETH comes with a management fee of 1.49% and is one of two Ethereum products making their debuts on Xetra, the other being 21Shares Ethereum ETP (21XE GY).
Each unit of ZETH is directly backed by Ether stored in institutional-grade safe custody and represents a claim on a predefined amount of Ether – a structure very similar to physically backed gold ETCs.
By purchasing an ETP, investors do not need to engage with the technical challenges of purchasing and storing cryptocurrencies such as setting up a cryptocurrency wallet or trading on unregulated crypto exchanges, and there is no need to manage cryptographic keys.
ZETH, like 21XE, is central counterparty cleared, something that is absent in underlying cryptocurrency markets. Clearing via a central counterparty reduces counterparty risk when trading. Clearing is handled by Eurex.
ETC Group’s first product, the BTCetc Bitcoin Exchange Traded Crypto (BTCE GY), has seen its assets under management grow to more than $1 billion in the eight months since its launch in June 2020. BTCE was the most traded product on Xetra’s ETN segment in the second half of 2020 with bid-ask spreads averaging just 13bps in the last ten days.
Bradley Duke, CEO 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.”
He continued: “Ethereum and Bitcoin have increased by 430% and 530% 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”
ZETH, like its sibling BTCE, is distributed and marketed in collaboration with white-label provider HANetf.
Hector McNeil, co-Founder and co-CEO at HANetf, said: “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. They address the concerns investors have around the infrastructure of investing in crypto assets, evidence of which is the huge growth in assets under management in their first product, BTCE.”