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Creation and Redemption: A BTCE Story

BTCE 3 Year Anniversary

There is no doubt that Bitcoin has permanently altered the investment landscape.

Bitcoin has achieved annualised returns of 78.1% over the last 7 years at the cost of similar annualised volatility. When played cautiously, Bitcoin can represent one of the best risk-reward plays for investors seeking uncorrelated alternative assets in their portfolio.

ETC Group research shows that even a small Bitcoin allocation of 3% in a traditional 60/40 portfolio can increase the internal rate of return over five years by up to 73%[1].

But not all products to access Bitcoin are equal.

Bitcoin ETPs - often imitated, never duplicated

In the three years since ETC Group launched the ETC Group Physical Bitcoin (BTCE), the amount of Bitcoin held by funds and exchange traded products (ETPs) has increased by 300,000 BTC.

The total AUM held by funds and ETPs has more than tripled from $6.2bn to $20.7bn while more than 100 crypto ETPs have come to market since the launch of BTCE.

ETPs: The most secure route to Bitcoin exposure

As the 2023 Trackinsight Global ETF Survey notes: “A comparative analysis of all implementation solutions available to investors to gain exposure to the spot price of cryptocurrencies shows that ETPs present the most secure and economical route…The growing appetite for ETPs over the last three years is a clear sign that there is an inherent need to protect the end investors and their assets.”

BTCE was created to put a regulatory wrapper around Bitcoin so that investors could get exposure to the cryptocurrency in the most recognisable and regulated manner.

Most liquid Bitcoin ETP

Data from Deutsche Börse XETRA, the primary listing venue and one of several European stock exchanges on which BTCE trades, shows that the physically-backed Bitcoin ETP has been the most traded exchange traded product from January 2023 to May 2023.

In March 2023, the order book turnover for BTCE on Xetra was €164.74m, three times more than its nearest competitor, and almost €60m higher than the largest fixed income product.

The five largest trading days on Xetra for BTCE since inception range from €121.4m to €174.4m.

Counted in US dollars, the total trading volume for BTCE on Deutsche Börse XETRA since launch is more than $13.8 billion.

The closest thing to a risk-free trade in Bitcoin — trading the basis with futures — is a popular arbitrage strategy which sees traders buy spot Bitcoin (or a highly liquid associated product like BTCE), while simultaneously selling long-dated Bitcoin futures, collecting ‘risk-free’ premium.

Because of its deep liquidity profile, BTCE seems to have become the instrument of choice for hedge funds and other institutions making this type of trade.

Sweat-free Bitcoin ETP

ETPs that allow the lending of their underlying assets are in an objectively higher counterparty risk position than those that do not.  

This was most notably researched in Crypto ETPs: Why Structure Matters, which explained how investors could be exposed to undue risk when crypto funds and ETPs lend out underlying assets.

BTCE’s structure and prospectus do not allow lending of its underlying assets, and investors have a legal claim to the Bitcoin backing it, should the issuer ever go out of business.

BTCE also benefits from a “bankruptcy remote” product structure, which segregates the underlying assets in the ETP. This means that even if the issuer becomes insolvent, the assets in the ETP are unaffected, giving investors the peace of mind they need to invest or trade with confidence.

An independent trustee holds a security interest in the underlying assets on investors’ behalf, which means that BTCE investors face no issuer default risk.

In the three years since BTCE launched in June 2020, the exchange rate of a single Bitcoin has almost tripled from $9,000 to $26,000.

The assets under management of Europe’s first centrally cleared Bitcoin product have similarly grown from zero to $429 million and in terms of underlying assets from 0 to 16,247 BTC kept in cold storage custody (as of June 19th 2023).

And while the next three years are bound to produce much volatility in crypto markets, BTCE will continue to be the backbone of this market, running like clockwork in the background.

Notes

[1] Performance data for the period of 02.01.2018-02.01.2023. Past performance is no guarantee of future performance.

Copyright © 2024 ETC Group. All rights reserved

AVIS IMPORTANT :

Cet article ne constitue ni un conseil en investissement ni une offre ou une sollicitation d'achat de produits financiers. Cet article est uniquement à des fins d'information générale, et il n'y a aucune assurance ou garantie explicite ou implicite quant à l'équité, l'exactitude, l'exhaustivité ou la justesse de cet article ou des opinions qui y sont contenues. Il est recommandé de ne pas se fier à l'équité, l'exactitude, l'exhaustivité ou la justesse de cet article ou des opinions qui y sont contenues. Veuillez noter que cet article n'est ni un conseil en investissement ni une offre ou une sollicitation d'acquérir des produits financiers ou des cryptomonnaies.

AVANT D'INVESTIR DANS LES CRYPTO ETP, LES INVESTISSEURS POTENTIELS DEVRAIENT PRENDRE EN COMPTE CE QUI SUIT :

Les investisseurs potentiels devraient rechercher des conseils indépendants et prendre en compte les informations pertinentes contenues dans le prospectus de base et les conditions finales des ETP, en particulier les facteurs de risque mentionnés dans ceux-ci. Le capital investi est à risque, et des pertes jusqu'à concurrence du montant investi sont possibles. Le produit est soumis à un risque intrinsèque de contrepartie à l'égard de l'émetteur des ETP et peut subir des pertes jusqu'à une perte totale si l'émetteur ne respecte pas ses obligations contractuelles. La structure juridique des ETP est équivalente à celle d'une dette. Les ETP sont traités comme d'autres instruments financiers.

À propos de ETC Group

ETC Group développe des instruments financiers innovants adossés à des actifs numériques, notamment l'ETC Group Physical Bitcoin (BTCE) et l'ETC Group Physical Ethereum (ZETH), qui sont cotés sur des échanges européens, comme le XETRA, Euronext, SIX, AQUIS UK et Wiener Börse.

ETC Group a lancé le premier produit négocié en bourse (exchange traded product- ETP) Bitcoin à compensation centralisée au monde en juin 2020 sur la Deutsche Börse XETRA, la plus grande plateforme de cotation d'ETF d'Europe.

As a company, ETC Group has previously launched BTCE - the world’s first centrally cleared Bitcoin exchange traded product on Deutsche Börse XETRA, the largest ETF trading venue in Europe, and also listed DA20, the world’s first crypto ETP tracking an MSCI index signalling a move towards investment management products. DA20 provides broad market exposure to investors by tracking an index of 20 cryptocurrencies which cover 85% of the total crypto market capitalisation.

Données de trading

Nom du produit
Bourse
Symbol ticker
ISIN
SEDOL
WKN / Valoren
Devise
Date de cotation
Aquis Exchange UK
Ticker
Listing date:
Symbol ticker BTCED QX
SEDOL BMWSLR9
ISIN DE000A27Z304
Valoren
WKN
WKN / Valoren /
USD
21-04-2023
Deutsche Börse XETRA
Ticker
Listing date:
Symbol ticker BTCE GR
SEDOL BMWSLR9
ISIN DE000A27Z304
Valoren
WKN A27Z30
WKN / Valoren A27Z30 /
EUR
21-04-2023
Euronext Paris
Ticker
Listing date:
Symbol ticker BTCE FP
SEDOL BN0ZB02
ISIN DE000A27Z304
Valoren
WKN
WKN / Valoren /
EUR
21-04-2023
SIX Swiss Exchange
Ticker
Listing date:
Symbol ticker BTCEGBP SW
SEDOL BLB3S66
ISIN DE000A27Z304
Valoren 55503260
WKN
WKN / Valoren / 55503260
GBP
21-04-2023
Aquis Exchange Amsterdam
Ticker
Listing date:
Symbol ticker BTCED QE
SEDOL BMWSLR9
ISIN DE000A27Z304
Valoren
WKN
WKN / Valoren /
EUR
21-04-2023
Cboe NL
Ticker
Listing date:
Symbol ticker BTCED I2
SEDOL BNM7CN6
ISIN DE000A27Z304
Valoren
WKN A27Z30
WKN / Valoren A27Z30 /
EUR
21-04-2023
SIX Swiss Exchange
Ticker
Listing date:
Symbol ticker BTCECHF SW
SEDOL BLB3S77
ISIN DE000A27Z304
Valoren 55503260
WKN
WKN / Valoren / 55503260
CHF
21-04-2023
Euronext Amsterdam
Ticker
Listing date:
Symbol ticker BTCE NA
SEDOL BN0ZB13
ISIN DE000A27Z304
Valoren
WKN
WKN / Valoren /
USD
21-04-2023
Aquis Exchange UK
Ticker
Listing date:
Symbol ticker BTCECZ QX
SEDOL BLB3S77
ISIN DE000A27Z304
Valoren
WKN
WKN / Valoren /
EUR
21-04-2023
SIX Swiss Exchange
Ticker
Listing date:
Symbol ticker BTCEUSD SW
SEDOL BLB3S55
ISIN DE000A27Z304
Valoren 55503260
WKN
WKN / Valoren / 55503260
USD
21-04-2023
Aquis Exchange UK
Ticker
Listing date:
Symbol ticker BTCEGZ QX
SEDOL BLB3S66
ISIN DE000A27Z304
Valoren
WKN
WKN / Valoren /
GBP
21-04-2023
Deutsche Börse XETRA
Ticker
Listing date:
Symbol ticker BTCF GR
SEDOL BMFCDV6
ISIN DE000A27Z304
Valoren
WKN A27Z30
WKN / Valoren A27Z30 /
USD
21-04-2023
Wiener Börse
Ticker
Listing date:
Symbol ticker BTCE AV
SEDOL BN4RH62 AT
ISIN DE000A27Z304
Valoren
WKN A27Z30
WKN / Valoren A27Z30 /
EUR
21-04-2023
SIX Swiss Exchange
Ticker
Listing date:
Symbol ticker ZETHCHF SW
SEDOL BN0WR94
ISIN DE000A3GMKD7
Valoren 110488627
WKN
WKN / Valoren / 110488627
CHF
21-04-2023
Euronext Paris
Ticker
Listing date:
Symbol ticker ZETH FP
SEDOL BN0Z9Y2
ISIN DE000A3GMKD7
Valoren
WKN
WKN / Valoren /
EUR
21-04-2023
SIX Swiss Exchange
Ticker
Listing date:
Symbol ticker ZETH SW
SEDOL BN0WR83
ISIN DE000A3GMKD7
Valoren 110488627
WKN
WKN / Valoren / 110488627
USD
21-04-2023
Deutsche Börse XETRA
Ticker
Listing date:
Symbol ticker ZETI GR
SEDOL BMFCDT4
ISIN DE000A3GMKD7
Valoren
WKN A3GMKD
WKN / Valoren A3GMKD /
USD
21-04-2023
Wiener Börse
Ticker
Listing date:
Symbol ticker ZETH AV
SEDOL BN4RH84 AT
ISIN DE000A3GMKD7
Valoren
WKN A3GMKD
WKN / Valoren A3GMKD /
EUR
21-04-2023
Deutsche Börse XETRA
Ticker
Listing date:
Symbol ticker ZETH GR
SEDOL BMV2RQ3
ISIN DE000A3GMKD7
Valoren
WKN A3GMKD
WKN / Valoren A3GMKD /
EUR
21-04-2023
SIX Swiss Exchange
Ticker
Listing date:
Symbol ticker ZETHGBP SW
SEDOL BN0WRB6
ISIN DE000A3GMKD7
Valoren 110488627
WKN
WKN / Valoren / 110488627
GBP
21-04-2023
Euronext Amsterdam
Ticker
Listing date:
Symbol ticker ZETH NA
SEDOL BN0Z9Z3
ISIN DE000A3GMKD7
Valoren
WKN
WKN / Valoren /
USD
21-04-2023
SIX Swiss Exchange
Ticker
Listing date:
Symbol ticker ESOLGBP SW
SEDOL BL6CF56
ISIN DE000A3GVKZ1
Valoren 115256504
WKN
WKN / Valoren / 115256504
GBP
21-04-2023
Deutsche Börse XETRA
Ticker
Listing date:
Symbol ticker ESOM GR
SEDOL BN6KDG1
ISIN DE000A3GVKZ1
Valoren
WKN A3GVKZ
WKN / Valoren A3GVKZ /
USD
21-04-2023
Deutsche Börse XETRA
Ticker
Listing date:
Symbol ticker ESOL GR
SEDOL BN473S6
ISIN DE000A3GVKZ1
Valoren
WKN A3GVKZ
WKN / Valoren A3GVKZ /
EUR
21-04-2023
SIX Swiss Exchange
Ticker
Listing date:
Symbol ticker ESOLCHF SW
SEDOL BL6CFB2
ISIN DE000A3GVKZ1
Valoren 115256504
WKN
WKN / Valoren / 115256504
CHF
21-04-2023
Euronext Paris
Ticker
Listing date:
Symbol ticker DA20 FP
SEDOL BRJ4M94 FR
ISIN DE000A3G3ZL3
Valoren -
WKN -
WKN / Valoren - / -
EUR
12-01-2024
BX Swiss
Ticker
Listing date:
Symbol ticker DA20CHF BW
SEDOL BRJN8F9
ISIN DE000A3G3ZL3
Valoren 126630022
WKN
WKN / Valoren / 126630022
CHF
09-01-2024
Deutsche Börse XETRA
Ticker
Listing date:
Symbol ticker DA21 GR
SEDOL BMF9D40
ISIN DE000A3G3ZL3
Valoren
WKN A3G3ZL
WKN / Valoren A3G3ZL /
USD
09-01-2024
Deutsche Börse XETRA
Ticker
Listing date:
Symbol ticker DA20 GR
SEDOL BMF9D28
ISIN DE000A3G3ZL3
Valoren
WKN A3G3ZL
WKN / Valoren A3G3ZL /
EUR
09-01-2024
Euronext Amsterdam
Ticker
Listing date:
Symbol ticker ELTC NA
SEDOL BN0Z9X1 NL
ISIN DE000A3GN5J9
Valoren
WKN
WKN / Valoren /
USD
21-04-2023
SIX Swiss Exchange
Ticker
Listing date:
Symbol ticker ELTCCHF SW
SEDOL BMZ5V11
ISIN DE000A3GN5J9
Valoren 111198508
WKN
WKN / Valoren / 111198508
CHF
21-04-2023
SIX Swiss Exchange
Ticker
Listing date:
Symbol ticker ELTCGBP SW
SEDOL BMZ5V22
ISIN DE000A3GN5J9
Valoren 111198508
WKN
WKN / Valoren / 111198508
GBP
21-04-2023
Deutsche Börse XETRA
Ticker
Listing date:
Symbol ticker ELTE GR
SEDOL BMFCDS3
ISIN DE000A3GN5J9
Valoren
WKN A3GN5J
WKN / Valoren A3GN5J /
USD
21-04-2023
Euronext Paris
Ticker
Listing date:
Symbol ticker ELTC FP
SEDOL BN0Z9V9 FR
ISIN DE000A3GN5J9
Valoren
WKN
WKN / Valoren /
EUR
21-04-2023
Deutsche Börse XETRA
Ticker
Listing date:
Symbol ticker ELTC GR
SEDOL BMW2449
ISIN DE000A3GN5J9
Valoren
WKN A3GN5J
WKN / Valoren A3GN5J /
EUR
21-04-2023
Wiener Börse
Ticker
Listing date:
Symbol ticker ELTC AV
SEDOL BN4QCT7 AT
ISIN DE000A3GN5J9
Valoren
WKN A3GN5J
WKN / Valoren A3GN5J /
EUR
21-04-2023
SIX Swiss Exchange
Ticker
Listing date:
Symbol ticker GXRP SE
SEDOL BP2R401
ISIN DE000A3GYNB0
Valoren 118513061
WKN
WKN / Valoren / 118513061
CHF
21-04-2023
Deutsche Börse XETRA
Ticker
Listing date:
Symbol ticker GXRQ GR
SEDOL BQ7ZVC8
ISIN DE000A3GYNB0
Valoren
WKN A3GYNB
WKN / Valoren A3GYNB /
USD
21-04-2023
Deutsche Börse XETRA
Ticker
Listing date:
Symbol ticker GXRP GR
SEDOL BQ7ZVB7
ISIN DE000A3GYNB0
Valoren
WKN A3GYNB
WKN / Valoren A3GYNB /
EUR
21-04-2023
Deutsche Börse XETRA
Ticker
Listing date:
Symbol ticker RDAM GR
SEDOL BN6KDD8
ISIN DE000A3GVKY4
Valoren
WKN A3GVKY
WKN / Valoren A3GVKY /
USD
21-04-2023
Deutsche Börse XETRA
Ticker
Listing date:
Symbol ticker RDAN GR
SEDOL BN473R5
ISIN DE000A3GVKY4
Valoren
WKN A3GVKY
WKN / Valoren A3GVKY /
EUR
21-04-2023
SIX Swiss Exchange
Ticker
Listing date:
Symbol ticker RDANCHF SW
SEDOL BL6CF90
ISIN DE000A3GVKY4
Valoren 115256508
WKN
WKN / Valoren / 115256508
CHF
21-04-2023
Deutsche Börse XETRA
Ticker
Listing date:
Symbol ticker ET33 GR
SEDOL BSMP8Z9
ISIN DE000A3G90G9
Valoren
WKN A3G90G
WKN / Valoren A3G90G /
USD
27-02-2024
Deutsche Börse XETRA
Ticker
Listing date:
Symbol ticker ET32 GR
SEDOL BSMP8Y8
ISIN DE000A3G90G9
Valoren
WKN A3G90G
WKN / Valoren A3G90G /
EUR
27-02-2024

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