Coinshares, a cryptocurrency and digital asset management firm, is launching a physically-backed bitcoin exchange-traded product (ETP) as the leading digital asset continues with its monster rally that started in December last year.
The new product, named Coinshares Physical Bitcoin (BITC) will trade under the ticker BITC on Switzerland’S principal exchange, SIX.
0.001 bitcoin will back each unit of BITC.
An ETP is a type of a security that tracks the performance of an underlying financial instrument, in this case, bitcoin. As this product is physically-backed, it directly holds the bitcoin to fulfill its obligations.
The responsibility of holding the bitcoins falls on Komainu, a joint venture between Coinshares, Ledger, and Nomura Holdings.
“A lot of institutional clients have a very strong due-diligence process, and we wanted to bring to market a best-in-class product to embrace that demand,” said Frank Spiteri, chief revenue officer at CoinShares. “We are ready, as of January, to embrace the forthcoming demand from institutional clients.”
Coinshares, which has about $2.9 billion in assets under management (AUM), is one of the earliest firms to offer a crypto product. The firm launched a regulated bitcoin investment vehicle in 2015 when the digital asset traded under $500.
The product will be launched with roughly $200 million in AUM, the level the new product needs to satisfy the baseline for investment consideration.
BTC investment products are not so popular in Europe
Bitcoin products are not as popular in Europe as they are in the U.S. For example, Grayscale’s $27 billion in AUM dwarves Coinshares’ $2.9 billion worth of assets.
Commenting on the popularity gap of bitcoin products between the two markets, Townsend Lansing, Head of Product said,
“The U.S. is a single, unified financial market, one of the largest, if not the largest in the world in terms of sophistication and access.”
The launch comes at a time when bitcoin is enjoying a massive rally that saw the digital asset’s price soar past $41,000, with institutions showing more appetite for the asset.