Investing in cryptocurrencies is a scary endeavor and especially so for traditional investors. Blockchain is intimidatingly complex and this has kept out a majority of investors who would love to get in on the act. WisdomTree Investments, a NASDAQ-listed traditional asset investment manager aims to change that with a newly launched physically-backed bitcoin exchange-traded product (ETP).
The asset manager announced the news on Tuesday revealing the launch of the Bitcoin ETP on the popular Swiss stock exchange SIX. The product is already live on the exchange with the ticker symbol BTCW.
A physically settled derivative, as opposed to a cash-settled derivative which is settled in fiat currency, is settled in the underlying asset. In this case, the Bitcoin ETP will be settled in the underlying Bitcoin cryptocurrency. The traders will have the option to cash out or keep their bitcoin.
The asset will track the price of Bitcoin and ensure that investors are able to invest in bitcoin without having to deal with the complexity of storing the asset. The asset manager has tapped the services of Swissquote bank to store the bitcoin assets in cold storage (offline where digital assets are safer).
WisdomTree’s Bitcoin ETP is only available to professional investors which keeps out retail investors who may be just as interested in accessing the product. WisdomTree, however, indicated that they are awaiting regulatory approval to launch the product for retail investors. According to WisdomTree, its new ETP will give investors “a simple, secure and cost-efficient way to gain exposure to Bitcoin while utilizing the best of traditional financial infrastructure and product structuring.”
WisdomTree’s Jason Guthrie said that,
“There is a demand for things in an exchange-traded format. There are plenty of clients that either can’t trade futures or find a physically-backed exchange-traded product to be operationally more efficient.”
Complimentary to that belief is that Bitcoin and its siblings are here to stay. WisdomTree’s head of Europe Alexis Marinof said in a statement that,
“We have been monitoring cryptocurrencies for some time and … have seen enough to believe that digital assets, like Bitcoin, are not a passing trend and can play a role in portfolios.”
WisdomTree’s ETP will now compete against an earlier Bitcoin ETP also launched on the SIX exchange by Zug-based Amun AG earlier this year. Amun has several other ETPs for Ripple, Bitcoin Cash, Ethereum and Tezos as well as a few crypto indices all trading on the SIX.