Bitcoin is leading other cryptocurrencies to achieve new milestones on its way to global acceptance. One of the most anticipated news in the crypt community is the approval of crypto spot and futures trading instruments on stock exchanges. A new Bitcoin spot exchange-traded product (ETP) has been launched.
The Bitcoin spot ETP, owned by Invesco Ltd, was approved by Deutsche Borse. Invesco, an investment management company, will have its Bitcoin spot ETP traded on the German digital stock exchange, Xetra. The spot ETP will trade under the name BITC from the next session. Investors are reportedly getting ready to explore the market through the instrument.
Invesco’s Bitcoin spot ETP is physically tied to Bitcoin. The company had submitted an application to the US Securities and Exchange Commission (SEC) to get approval for the Bitcoin futures ETF. The application’s status is yet unknown, but Invesco is not waiting. Invesco has now launched its Bitcoin spot ETP in Europe.
The Deutsche Borse operates the German stock market and is arguably the strongest in Europe, given the size of Germany’s economy. It announced today, November 29, that it has listed Invesco Physical Bitcoin ETN. It said that the listing of such instruments on a regulated exchange significantly reduces the risks that consumers may face.
Since it is a physically-backed Bitcoin spot ETP, BITC would need known storage of bitcoin. To solve this, Invesco has partnered with Standard Chartered bank to provide storage for bitcoin. Standard Chartered has a crypto custody service named Zodia that clients can access. Zodia was developed and launched late last year and is regulated by the UK’s apex financial regulator, the FCA.
According to the information released by the Deutsche Borse, Northern Trust (Nasdaq: NTRS), a financial services and investment company, will act as administrator for the ETF, BITC. It is noteworthy that the company is a co-investor in Zodia. The other partner of the deal is CoinShares.
CoinShares has the role of index sponsor for the instrument. Coinshare will also serve as the ‘execution agent’. This simply means that BITC will be traded using the live market data obtained from CoinShares. The data will however exclude fees.
The new ETP joins 26 ETNs that are already listed on the German digital stock exchange. These ETNs are different cryptocurrencies.
The US SEC Has Not Approved Any Bitcoin Spot ETF
Despite a number of applications submitted to it for Bitcoin spot-ETFs, the US SEC has not approved any as of press time. The SEC has not commented on any previous applications to save VanECk’s which it soundly rejected citing an overly risky exposure to the volatility of bitcoin.
Yet, analysts have said that Bitcoin spot ETFs are less risky than Futures ETF and will offer investors a better way to make profits. The SEC has not commented further on the issue and is yet to announce regulations for the crypto industry. Cryptocurrency trading in the US remains largely unregulated, but the US government has its agencies working on regulations.