Cryptocurrency: ETF and other financial products

Bitcoin remained largely unnoticed by the mainstream of the financial world for years. This changed with the rapid rise of the cryptocurrency in 2017. Despite subsequent renewed price declines, the best-known digital currencies have now achieved remarkable market capitalisations. Even in China, where cryptocurrencies were first frowned upon, many companies buy Bitcoin on the Hong Kong Bitcoin Exchange. Besides Bitcoin, the top 10 includes Bitcoin Cash as the first fork, as well as Ethereum, Litecoin or Ripple with modified blockchain and interesting additional functions. Acceptance is increasing, and despite the still prevailing volatility of the prices, many experts see high potential. There will even be a digital euro soon.

Especially the coins of the first hour, i.e. Bitcoin or Ethereum, will hardly disappear again, which is why a direct investment is being made by more and more private investors. However, for physical trading with cryptocurrencies, one has to deal with the concept of the blockchain, maintain a suitable and, above all, secure wallet and also keep these still very immaterial assets in good custody. To accommodate investors who prefer to use familiar financial products, various offers have already been launched that make crypto tradable by conventional means - including contracts for difference or certificates. The desire for a crypto ETF is also being voiced again and again.

Investors cannot yet buy a crypto ETF

So far, no financial service provider has been able to accommodate investors' wishes in Exness Asia pte ltd, because crypto ETFs directly on the coins, for example as a Bitcoin ETF, are simply not available. This is due to the construction of listed index funds - they are always based on an index, which is why a "crypto ETF" in the literal sense is not feasible. However, crypto exchanges are trying to find an alternative. They offer the so-called "bundles". These are nothing more than a basket of selected cryptocurrencies, with the investment investors profit directly from the price development. Such a bundle is basically a fund on digital currencies, issued by the respective exchange. The crypto-coins contained in it are actually deposited as cover, as with a physical fund. If the prices rise, investors naturally make profits with such bundles, although the volatility is certainly not everyone's cup of tea.

ETN: Exchange Traded Note for crypto trading

Listed like an ETF is another financial product, namely ETNs on cryptocurrencies. The construct of the exchange traded note is based on the ETC used in commodity trading. Both financial instruments allow you to trade an underlying asset without actually having to buy it. The advantage of an ETN is that it can track an index, but also an individual asset such as a cryptocurrency.

Technically, an ETN is a debt obligation of the issuer, similar to a certificate, and can be collateralised like a certificate. For investors who have long hoped for a "Bitcoin ETF", a corresponding ETN on the Bitcoin has now been launched on the Frankfurt Stock Exchange. The BTCetc Bitcoin Exchange Traded Crypto is fully collateralised by Bitcoin and tradable under ISIN DE000A27Z304.

New ETNs on indices and individual coins

Seven more ETNs on cryptocurrencies from Swiss issuer 21Shares, formerly known as Amun, are tradable on the Stuttgart Stock Exchange.

• Amun Crypto Basket Index ETP, WKN A2TT3D
• Amun Bitcoin Suisse BTC/ETH ETP WKN A22FMC
• Amun Bitcoin Cash (ABCH) ETP WKN A2126N
• Amun Bitcoin Crypto Single Tracker WKN A2T64E
• Amun Ethereum Crypto Single Tracker WKN A2T68Z
• Amun Ripple XRP (AXRP) ETP WKN A2UBKC
• Amun Bitwise Select 10 Large Cap Crypto ETP (KEYS) WKN A2107P 

The financial products are illustrations of indices, but also of individual cryptocurrencies such as Bitcoin, Bitcoin Cash, Ethereum and Ripple.

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