Exchange-traded products abound, but crypto is still waiting for an ETF

Swiss SIX Exchange, Switzerland’s principal stock exchange, continues to expand its crypto products with a new Bitcoin (BTC) exchange-traded product, or ETP.

On Jan. 13, SIX launched trading of the BTCetc Bitcoin ETP (BTCE), a new crypto ETP product issued by London-based investment firm ETC Group. The newly listed ETP tracks the price of Bitcoin, providing investors with a new way to get exposure to the world’s largest cryptocurrency. Each BTCE unit provides holders with a claim on a predefined amount of BTC.

ETC Group specializes in building new digital asset-backed securities and is backed by shareholders like XTX Markets’s venture capital arm XTX Ventures and financial services firm ITI Capital.

SIX is one of the world’s biggest ETP trading platforms, listing a wide number of crypto investment products. After listing the world’s first crypto ETP in late 2018, SIX has been actively introducing diverse ETPs including several products backed by 21Shares. In July 2020, SIX listed the Bitcoin Capital Active ETP, an actively managed ETP trading BTC against 14 top altcoins like Ether (ETH).

An ETP is a type of security that is priced derivatively and trades based on investment tools such as a commodity, a currency, a share price, or an interest rate. Opposed to crypto exchange-traded funds, or ETFs, crypto ETPs are always 100% backed by the assets they are tracking. 

However, while crypto ETPs increasingly pop up on exchanges, especially in Europe, the digital asset industry is still waiting for the first crypto ETF.

The crypto community has made numerous attempts to launch a crypto ETF in recent years, with investment management firm VanEck becoming the first company to file for a Bitcoin ETF in July 2018. The United States Securities and Exchange Commission pulled back many ETF efforts, including two applications by Gemini founders Cameron and Tyler Winklevoss.

In the end, these applications were eventually dismissed by regulators, many of whom still believed that the crypto industry hadn't sufficiently matured in order to support an ETF. The United States Securities Exchange has also expressed concern over the volatility of crypto assets and the issue of custody vis-a-vis a Bitcoin ETF. 

Despite many failed attempts, the crypto industry continues its efforts to list a Bitcoin ETF on a major exchange. On Jan. 11, Canadian investment fund manager Arxnovum Investments filed a prospectus for a Bitcoin ETF with Canadian securities regulators.