The latest bitcoin ETP from issuer ETC Group calculates the fund’s net asset value three times a day instead of just once.
The ETP is designed to create three liquidity windows per day for investors in different time zones.
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Posted April 26, 2024 at 5:42 pm EST.
A fresh entrant to the exchange traded spot bitcoin market has launched with an extended-hours trading twist.
ETC Group, a crypto exchange traded product (ETP) issuer with about $1.5 billion of assets under management, on Thursday launched its ETC Group Core Bitcoin ETP. It trades on the German stock exchange XETRA under the ticker BTC1 and imposes an annual fee of 0.3%.
Unlike conventional ETPs and their ETF counterparts, which calculate the fund’s net asset value (NAV) once a day, BTC1 does so three times in a 24-hour period. The idea is to increase liquidity by introducing two additional windows for creating and redeeming BTC1 shares. The repricing of shares is carried out during those times.
It’s especially catered to bridge liquidity and timing gaps between traders spread across time zones in U.S., Europe, and Asia, the firm said in a statement, adding that the setup makes for the “first globally oriented Bitcoin spot ETP.” A spokesperson for ETC Group did not immediately return a request for comment.
Sui Chung, the CEO of crypto index provider CF Benchmarks, said the launch brings the product more in line with the around-the-clock trading of cryptocurrencies. CF Benchmarks is BTC1’s index provider.
“They’re the first to really leverage that actual crypto market infrastructure and the benefits of the crypto market infrastructure into a regulated financial product … It’s almost like TradFi is leveraging what the crypto asset class has built,” Chung said.
Read more: Around-the-Clock NYSE Trading Could ‘Boost Everything’ — Including Crypto
Some institutional traders have shied away from crypto ETPs and their US ETF counterparts because of overnight volatility in the underlying digital assets. That means they sometimes face the prospect of having to hold sinking positions until the market opens.
That doesn’t tend to be a problem for exchange traded vehicles with stock holdings, because equities only trade thinly overnight. But the 24/7 nature of crypto can pose pricing problems for ETP products in the sector.
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