Specialist crypto ETP provider ETC Group has unveiled its fourth product – the BCHetc – ETC Group Physical Bitcoin Cash (BTCH GY).
Bradley Duke, CEO of ETC Group.
Listed on Deutsche Börse Xetra, the ETP provides institutional investors with fully backed exposure to bitcoin cash.
Bitcoin cash originated as a spin-off from bitcoin in mid-2017 by miners and developers concerned with the future of bitcoin and its ability to scale effectively.
These developers prepared a code change – called a hard fork – which split the bitcoin blockchain in two. At the time of the fork, anyone owning bitcoin was also in possession of the same number of bitcoin cash units.
The technical difference between bitcoin cash and bitcoin is that bitcoin cash allows larger blocks in its blockchain which, in theory, allows it to process more transactions per second. Since its debut, bitcoin cash has experienced global merchant adoption as a cross-border payments protocol promising cheap, fast transactions with all the security, transparency, and tamper-resistant benefits of the original bitcoin blockchain. It is currently ranked as the seventeenth-largest cryptocurrency globally.
As with ETC Group’s existing ETPs – the $775 million BTCetc – ETC Group Physical Bitcoin (BTCE GY), the $195m ETHetc – ETC Group Physical Ethereum (ZETH GY), and the $8.5m LTCetc – ETC Group Physical Litecoin ETC (ELTC GY) – BTCH has been brought to market in partnership with London-based white-label issuer HANetf, which is advising on operations and taking lead responsibility for product marketing and distribution.
Each unit of BTCH is fully backed by “physical” bitcoin cash, providing investors with direct exposure to the cryptocurrency with the added oversight, security, and liquidity of an ETP.
By investing in the ETP, investors will be able to bypass the technical challenges of purchasing bitcoin cash directly from cryptocurrency markets such as setting up a digital wallet, managing cryptographic keys, or trading on unregulated crypto exchanges.
The ETP is cleared through a central counterparty (CCP) system, as opposed to bilateral settlement, reducing the counterparty risk that market participants are exposed to. This feature is significant for institutional investors which are typically prevented from trading non-centrally-cleared instruments.
The ETP is tradeable in euros and comes with an annual fee of 1.95%, notably below the 2.50% charged by the $16m 21Shares Bitcoin Cash ETP (21XC GY), the only other directly backed bitcoin cash ETP available in Europe.
Bradley Duke, CEO of ETC Group, said: “Following the successful launch of our bitcoin, ethereum, and litecoin ETCs, which are now the most-traded products of their kind in Europe, we have seen strong demand from investors for a bitcoin cash product. We expect BTCH to prove popular with professional investors who want a cleaner, simpler, and more secure way to gain exposure to the booming investment universe of digital assets.”
Hector McNeil, co-Founder and co-CEO of HANetf, added: “ETC Group has established itself as a market leader in offering investment products focused on crypto assets. ETC Group is building products that adhere to the complex and exacting standards of the institutional investor, and BTCH will give investors another secure way to gain exposure to crypto products.”