London ETC Group to launch Regulated Physically-backed Bitcoin ETC on Germany’s Deutsche Borse Xetra Exchange

Institutional participation in the crypto markets has seen a major uptick in the last four months with the global economy and stock markets showing fragile behavior.

In a major new development, a Bitcoin derivative product is all set to land on Germany’s popular stock exchange Deutsche Börse. The London-based financial services giant ETC Group plans to list a regulated and physically-settled Bitcoin Exchange-traded product (ETP) on Deutsche Börse’s Xetra electronic trading market by the end of this month.

On Tuesday, June 9, the ETC Group released the contract called the Bitcoin Exchange Traded Crypto (BTCE) which tracks the price of Bitcoin and is 100% physically-backed by the cryptocurrency. As the contract goes live, investors from Italy, UK, Austria, and other parts of Europe will get access to the BTCE.

Each BTCE contract will be worth 0.001 Bitcoin wherein the holder of each unit of this derivative can claim a specific amount of Bitcoin. Each of these unit can be redeemed either in cash or in BTC.

Furthermore, the ETP will be distributed and marketed on a platform that is operated by Haneft, an EU-approved private issuer of exchange-traded-funds. Speaking on the listing plan, Bradley Duke, chief executive officer of ETC Group, said:

“With BTCE, we are transporting bitcoin into the fold of mainstream, regulated financial markets. Investors get the benefits of trading and owning bitcoin through a regulated security while having the optionality of redeeming bitcoin if they choose”.

Germany's top financial regulatory BaFin has already approved the ETC product three months back. Besides, BaFin has officially announced to consider cryptocurrencies as legitimate financial instruments.

For every unit of the ETP product, “there is bitcoin stored in regulated, institutional-grade safe” which is identified as the BitGo Trust Company. Banks or securities broker can assume the custody of BTCE bought through their desks on behalf of investors.

The London-based company said that the new product can easily assume liquidity from several crypto exchanges. It explained: “BTCE…is supported by a network of world-class Authorized 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”.