Invesco has launched its spot Bitcoin (BTC) exchange-traded note (ETN) on Deutsche Börse’s digital exchange, Xetra, this development comes only days after filing for a Bitcoin (BTC) futures exchange-traded fund (ETF) in the United States.
On November 29, Deutsche Börse, a German stock exchange, said the Invesco Physical Bitcoin ETN would be listed on its digital stock exchange, Xetra. BTIC will be the ticker symbol for the new product.
The new ETN product, which has been admitted to the Frankfurt Stock Exchange’s regulated market, is physically backed by Bitcoin and is centrally cleared through Eurex Clearing.
“Investors benefit from greatly reduced risks in transaction settlement through central clearing,” according to the release.
According to ETF Stream, custody of Bitcoin held on behalf of BTIC would be provided by Standard Chartered’s Zodia crypto custody platform.
Northern Trust, a Zodia co-investor, will reportedly serve as BTIC’s administrator. Zodia is a cryptocurrency that was launched in late 2020 and is regulated by the Financial Conduct Authority in the United Kingdom.
CoinShares, a major European digital asset management and long-time Invesco partner will serve as both the index sponsor and execution agent for the new ETN.
BTIC tracks the CoinShares Bitcoin Hourly Reference Rate index, which delivers the underlying asset’s price performance minus fees.
The development comes after Invesco withdrew its filing with the US Securities and Exchange Commission in October for a Bitcoin futures-based ETF in order to provide investors with more options than just a 100% BTC futures ETF.
“Physical bitcoin is a more transparent market.” One of our concerns was the depth of synthetic liquidity and what it may mean for valuations over time, which was something we weren’t completely comfortable with,” said Gary Buxton, Invesco’s head of ETFs and indexed strategies. Invesco has been working on the product “since the middle of 2018,” he noted.
Invesco’s entry into the European crypto exchange-traded product (ETP) market comes as Deutsche Börse actively expands the range of crypto derivatives products available across its platforms.
According to the company, the Xetra exchange offers up to 26 ETNs on various cryptocurrencies, including Bitcoin, Ether (ETH), Bitcoin Cash (BCH), Cardano (ADA), Litecoin (LTC), and others, from seven different suppliers.
ETFs and ETNs, both types of ETPs, are similar in that they track an underlying asset and trade on exchanges in the same way that other securities do.
An ETN is more like a bond, providing exposure to an unsecured debt note issued by an institution, whereas an ETF assumes ownership in a fund that owns the assets.