Institutional-grade exchange-traded products (ETPs) are all the rage in the European cryptocurrency market with the increased flow of institutional investors, and asset management firms delivering as required. Earlier today, British crypto-investment manager ETC Group announced that it will be launching 5 new “exchange-traded cryptocurrencies” at the Frankfurt stock exchange this month, according to a report by Reuters.
The ETCs will list on the Deutsche Boerse electronic trading platform Xetra, which has been witnessing a flurry of crypto activity recently. The products will specifically track top altcoins, which include the native tokens of Cardano, Polkadot, Solana, Stellar, and Tezos.
Earlier this month, the ETC Group had launched its first equity ETF targeting digital assets and blockchain by providing exposure to companies delving into the sector. It had previously listed ETPs in Paris, Amsterdam, and London in June.
On the release of these altcoin ETCs, Bradley Duke, co-CEO of ETC Group, commented,
“Investors in digital assets are becoming more sophisticated and demanding with an appetite for exposure beyond just bitcoin and ether.”
This could indeed be held true for the European market. With the rise of DeFi, alternate blockchains rivaling Ethereum have risen greatly in valuation and there is increased consumer demand for investment products with exposure to the same.
This is because these products tend to be regulated and appear less risky and tedious than holding the actual currency. The crypto-ETP market in Europe has largely overtaken investment products backed by traditional assets, with an October report by MorningStar revealing the top 20 ETPs to all be backed by assets in the cryptocurrency industry.
Among them, it was also found that ETPs backed by Polkadot far outperformed those tracking Ethereum or Bitcoin, suggesting the demand for altcoin products. Overall, this demand has allowed the European crypto ETP sector to flourish.
Earlier today, American investment firm WisdomTree listed its Crypto Mega Cap Equal Weight ETP on Euronext exchanges in Paris and Amsterdam, which gives equal weightage to Bitcoin and Ethereum. Only a few days back the company launched crypto-basket ETPs on the German Xetra along with the Swiss Stock Exchange SIX, which had included exposure to both big cap and small-cap cryptocurrencies.