Again and again it is from Crypto ETPs speech. But what is it about this investment product and which Advantages and disadvantages do crypto ETPs have? In this article we will explain to you what a crypto ETP is and what characteristics distinguish it.
What are ETPs?
The abbreviation ETP stands for Exchange Traded Products. Exchange traded products are securities that are traded on the stock exchange.
The most well-known subcategory of exchange-traded products are the exchange-traded funds, or ETFs for short.
In addition, counting ETNs, Exchange traded notes, i.e. products through which investors can invest in currencies, and ETCs, Exchange Traded Commodities/Cryptocurrencies, among the Exchange Traded Products.
ETCs are securities that allow investors to invest in the asset class of commodities or currencies.
The aim of an ETP is to map a specific index or underlying as accurately as possible and thus achieve a comparable performance.
That’s why the performance of ETPs is easy to understand. Since an ETP is based on an index or underlying, the product is “passively managed”. Which Administration fee is appropriate low.
All exchange traded products, ETFs, ETNs and ETCs, are listed securities that can be bought and sold just as easily as stocks and bonds. The demand for ETPs has increased significantly in recent years: while just under 500 ETPs were listed worldwide in 2009, this number has increased to more than 9,000 by July 2021 – with the very popular ETFs accounting for more than 90%.
What is a Crypto ETP?
A crypto ETP, or “Exchange traded Crypto” product (ETC), represents cryptocurrencies such as Bitcoin or Ethereum and passively tracks their price development.
ETCs are very similar in structure to bonds deposited with, for example, gold: instead of a certain amount of gold, each crypto ETP share is covered by cryptocurrencies.
These products enable all investors to participate in the growth of digital assets and are traded on the stock exchanges just like stocks and ETFs.
Advantages of ETCs
This form of investment represents a an uncomplicated and safe alternative for the classic storage of crypto values in digital wallets.
Investors do not have to deal with their establishment and possible security risks.
As an investor, for example, you can simply purchase Bitcoin ETCs on the stock exchange and add them to your own portfolio. The entry via the stock exchange also means trading margins customary on the stock exchange, and no hidden costs or spreads, as can be the case with numerous crypto exchanges or other platforms.
With the secure and regulated storage of digital assets, there is also an increased Investor protection this is an advantage of regulated markets.
Crypto ETCs also allow institutional investorsTo include bitcoins and other digital assets in their portfolio or offering, as in most cases they are not allowed to invest directly in cryptocurrencies due to internal regulations and regulations.
Disadvantages of ETCs
Due to the fact that crypto ETPs are traded on an exchange, investors are Reception opening hours on the other hand, classic online crypto exchanges are open around the clock.
In order to Costto cover the management fees incurred by the operator of a crypto ETP, as well as order fees for their purchase via the stock exchange.
However, these can often be lower in total than when investing via one of the numerous crypto platforms or apps.
Crypto ETPs at the ETC Group
The ETC Group is Europe’s leading provider of innovative cryptocurrency-based securities.
As a young company, the ETC Group has the world’s first Bitcoin ETP launched on the market with central clearing, listed on the Deutsche Börse XETRA, the largest ETF trading exchange in Europe.
Since then, the ETC Group, with other innovative product ideas, has been a pioneer in the field of innovation around exchange-traded products based on digital currencies.
Crypto ETPs at the ETC Group
Now trade ETCs directly with the ETC Group. You have the following advantages:
- More than 10 tradable ETCs on the XETRA exchange
- Special trend topics-ETFs such as the Metaverse ETF
- Invest in ETCs with a savings plan