Ben Strack

Pando Asset is the latest fund group looking to launch a spot bitcoin ETF in the US.&nbsp;



The Switzerland-based asset manager joins a crowded field of issuers looking to bring to market a type of fund the US Securities and Exchange Commission has never approved.&nbsp;



The company proposed its Pando Asset Spot Bitcoin Trust in a Wednesday filing. The trust’s&nbsp; assets would consist primarily of bitcoin held by its custodian — Coinbase Custody Trust company. The <a href="https://www.sec.gov/Archives/edgar/data/2001771/000182912623007712/pandoasset_s1.htm">disclosure</a> names BNY Mellon as the trust administrator.



A Pando Asset spokesperson did not immediately return a request for comment.&nbsp;



About a dozen issuers — including traditional finance giants BlackRock, Fidelity and Invesco — have live spot bitcoin ETF filings in front of the SEC.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">13 potential <a href="https://twitter.com/hashtag/bitcoin?src=hash&amp;ref_src=twsrc%5Etfw">#bitcoin</a> ETF Issuers now. Doubt this is ready to go on first day with the others but crazier things have happened I guess <a href="https://t.co/W8kfemI6Uc">https://t.co/W8kfemI6Uc</a>&mdash; James Seyffart (@JSeyff) <a href="https://twitter.com/JSeyff/status/1729938389552497075?ref_src=twsrc%5Etfw">November 29, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Regulators in Canada, Brazil and the Netherlands have approved spot crypto ETFs in recent years. Crypto exchange-traded notes (ETNs) — debt instruments typically collateralized by the underlying exposure, such as bitcoin — have been around even longer.



Read more: <a href="https://blockworks.co/news/us-spot-bitcoin-etf">US spot bitcoin ETF not impossible — just ask the rest of the world</a>



Pando Asset currently offers three exchange-traded products (ETPs) that trade on the SIX Swiss Exchange, including ones focused on bitcoin and ether. The third allocates to six crypto assets: bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>), ether (<a href="https://blockworks.co/price/eth">ETH</a>), binance coin (<a href="https://blockworks.co/price/bnb">BNB</a>), cardano (<a href="https://blockworks.co/price/ada">ADA</a>), solana (<a href="https://blockworks.co/price/sol">SOL</a>) and polkadot (<a href="https://blockworks.co/price/dot">DOT</a>).&nbsp; &nbsp;&nbsp;



The company is not the first looking to bring its European crypto product expertise to the US.&nbsp;



21Shares, which also offers a range of ETPs in Europe, has filed for spot bitcoin and ether products with US-based partner Ark Invest.&nbsp;



<a href="https://blockworks.co/news/sec-decision-date-bitcoin-etf#:~:text=Ark%20Invest%20and%2021Shares%20filed,11.">The SEC is expected to rule</a> on the proposed Ark 21Shares Bitcoin ETF by Jan. 10. Industry watchers have said the regulator could choose to greenlight a bunch of such products at that time, with <a href="https://blockworks.co/news/21shares-bitcoin-etf-approval-incoming">Bloomberg Intelligence analysts giving 90% odds</a> of such approval.&nbsp;



A spokesperson for the regulator has declined to comment on this matter.



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ETFs

Spot bitcoin ETF market sees new applicant ahead of SEC ruling

Michael Bodley

CoinShares, the European crypto ETP specialist, is making a first-time push into actively managed digital asset products — including a hedge fund targeting US institutions.&nbsp;



Headquartered in Jersey, the publicly traded company has built its financial reputation by issuing liquid ETPs that encompass a diverse range of spot cryptocurrencies. Alongside this, the company has gained recognition for its valuable industry research. The firm operates a venture capital arm that accepts external investments, including contributions from US investors.



But an <a href="https://blockworks.co/tag/sec">SEC</a> filing on Wednesday indicated that CoinsShares has laid the groundwork for, and is nearing the launch of, what appears to be its first hedge fund open to accredited US investors. As of the most recent close in Europe, the company&#8217;s asset management arm, including assets held within its ETP products, amounted to approximately $3 billion.



The fund, CoinShares Bitcoin US Feeder Fund appears set to start trading in the coming weeks. Further details regarding its investment strategy weren’t immediately available. 



The feeder fund structure indicates that the vehicle is set to funnel limited partner capital into a master fund. This could in turn serve as a conduit for incoming capital from European investors. A spokesperson for CoinShares declined to comment.



The move comes as industry participants say launches of institutional-grade, liquid vehicles concentrating on cryptocurrencies have slowed, even as venture capital and private equity raises have picked up from lows notched in the fourth quarter of 2022.&nbsp;



Many traditional finance firms that delved into cryptocurrency trading last year have chosen to put a hold on their expansion plans. Many have adopted a wait-and-see approach, likely due to the regulatory challenges posed by the SEC and CFTC in the United States.



The move, for CoinShares, follows a rocky end of 2022, including <a href="https://blockworks.co/news/coinshares-unsure-it-can-recover-any-of-31-million-ftx-exposure">booking a 29% drop in combined income during the fourth quarter.</a> The company had significant exposure to FTX.&nbsp;&nbsp;



<h2 class="wp-block-heading">Asset management plans brewing&nbsp;</h2>



CoinShares said in its first quarter earnings <a href="https://s3.amazonaws.com/a.storyblok.com/f/155294/x/97c813bc14/coinshares_q1_23_report.pdf" target="_blank" rel="noreferrer noopener">report</a> that the company’s leadership sees opportunity in a shift from large investors toward active, alternative investment products. 



“Today’s investors seek more than passive exposure to digital assets and are demanding increasingly sophisticated investment alternatives,” the company wrote in its report.&nbsp;



It then lifted the curtain on the company’s plans for a significant shift from its core ETP products. ETPs are the rough equivalent of ETFs in the US, where no spot bitcoin or crypto product has ever been approved.&nbsp;



CoinShares said it would outline plans for an “alternative asset management business,” which would bring that division more in line with US crypto firms that engage in research, trading and asset management, including hedge funds.



The company wrote that it was in the process of vetting external talent and making hires to support the initiative, which would represent a shift from its long time proprietary trading strategies. New strategies open to external investors would be seeded by CoinShares, according to the company.&nbsp;



For first-time runners of external capital, getting off the ground with seed money can provide an outlet to build up a track record before actively fundraising. It’s not clear how much external capital CoinShares would like to drum up for the new venture, which would likely include other strategies in addition to the bitcoin-focused hedge fund.&nbsp;



The new business, like most hedge fund products, plans to impose performance fees on top of management fees. ETPs did not impose performance fees.&nbsp;



The professed plan of CoinShares, led by CEO Jean-Marie Mognetti, is to “transform from a pure proprietary model with no external investors to a traditional active asset manager platform.”



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asset management

CoinShares courting US investors in first asset management push

An ETP giving investors exposure to the largest liquid staking provider is the first of its kind, and comes after the market capitalization of liquid staking governance tokens has surged following Ethereum’s Shapella upgrade.&nbsp;



The 21Shares Lido DAO ETP — with underlying asset LDO — is listed on the BX Swiss exchange and is set to become available on Euronext Paris on Wednesday, the company revealed Monday.



The $1.6 billion market cap of Lido DAO (LDO) accounts for about half the market cap of <a href="https://www.coingecko.com/en/categories/liquid-staking-governance-tokens">all</a> liquid staking governance tokens. Rocket pool (RPL) sits behind LDO with a market cap of $800 million. 



LDO’s price is down nearly 22% in the past seven days.&nbsp;



Lido users who stake their assets receive an equal amount of staked tokens, called stTokens, that accrue rewards.&nbsp;



These tokens can be traded on the secondary market and used within DeFi applications — a process known as liquid staking. This allows users to tap into staking benefits without lock-up periods or high minimum amounts.



Lido is responsible for $12.6 billion in total value locked, according to Defi Llama <a href="https://defillama.com/protocol/lido">data</a> — roughly two-thirds of the <a href="https://defillama.com/categories">combined</a> $18.4 billion total value locked across liquid staking.



The market cap of Lido staked ether (stETH) has grown roughly 95% year over year from $6.47 billion in June 2022, according to Arthur Krause, 21Shares’ director of ETP product.



“Despite the well-known crypto winter, very often the most innovative opportunities appear during challenging times, and the emergence of liquid staking is a good example,” Krause told Blockworks in an email.



Liquid staking governance token performance helped DeFi’s market capitalization jump by nearly $30 billion, or 65%, in the first quarter, according to a CoinGecko <a href="https://www.coingecko.com/research/publications/2023-q1-crypto-report">report</a> published last month.



Liquid staking governance tokens saw a 210.9% increase in market cap during the first three months of 2023 — a quarter in which <a href="https://blockworks.co/news/shapella-upgrade-brings-ethereum-closer-to-long-awaited-withdrawals">Ethereum’s Shapella upgrade</a> took place. The liquid staking category surpassed lending protocols to become the third-largest in DeFi.



There is currently about 24.7 million ETH <a href="https://etherscan.io/address/0x00000000219ab540356cbb839cbe05303d7705fa#analytics">deposited</a> in the beacon smart contract — a roughly 25% jump since May 1.



Lido has the largest percentage of ETH staked with roughly 32% share, according to a June 9 research note by Compass Point Research &amp; Trading analysts Chase White and Joe Flynn. Centralized exchanges, led by Coinbase, cumulatively contribute about 24% of the number of ETH staked.



The successful Shanghai hard fork and the de-risking of staking could drive “significant growth and adoption” of staking-as-a-service solutions and the overall liquid staking market, the analysts added.



“We expect that the staking [total addressable market] is set to expand considerably in the months post withdrawals, and expect that over time the percentage of ETH supply that is staked will move from ~19% to +30-40%, more inline with other [proof-of-stake] chains,” White and Flynn wrote.



Though the Lido DAO ETP is the first of its kind, 21Shares has launched products offering exposure to other DAO tokens, such as the 21Shares Aave ETP (AAVE) and the 21Shares Uniswap ETP (AUNI). 



The company has also brought to market a Staking Basket Index ETP (<a href="https://21shares.com/product/STAKE">STAKE</a>) and its Stacks Staking ETP (<a href="https://21shares.com/product/ASTX">ASTX</a>) in January and April, respectively.



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ETPs

21Shares debuts Lido-focused ETP amid liquid staking surge

Three-quarters of professional investors still aren’t invested in crypto, but about half said they are interested in allocating to ETPs focused on the space.



An ETP, or exchange-traded product, is a fund structure that allows investors to gain exposure to one asset, or a basket of different investable assets — in this case, cryptocurrencies. Gaining exposure to crypto via the fund wrapper is overall more appealing than dealing with digital wallets, according to survey respondents.



The study by Trackinsight — with help from fund giants JPMorgan Asset Management and State Street — surveyed 549 professional investors and fund selectors that allocate roughly $900 billion across ETF strategies.&nbsp;



Though 75% said they don’t have exposure to the sector, 48% said they would consider investing in single-token ETPs. Roughly the same amount — 47% — would potentially be interested in investing in ETPs offering exposure to more than one crypto asset, the survey found.&nbsp;&nbsp;



Investing directly in cryptocurrencies is less attractive, according to the findings, as 37% reported interest there. Roughly 23% of professional investors said they would not consider investing in crypto.&nbsp;



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1968" height="834" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/05/ETF-Survey-Chart.jpg?w=1024&amp;h=1024" alt="" class="wp-image-55655" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/05/ETF-Survey-Chart.jpg?w=1968 1968w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/ETF-Survey-Chart.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/ETF-Survey-Chart.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/ETF-Survey-Chart.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/ETF-Survey-Chart.jpg?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/ETF-Survey-Chart.jpg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/ETF-Survey-Chart.jpg?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/ETF-Survey-Chart.jpg?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/ETF-Survey-Chart.jpg?w=80 80w" sizes="auto, (max-width: 1968px) 100vw, 1968px" /></figure>



Frank Koudelka, global ETF product specialist at State Street, said in a statement that the survey touches on what he called “megatrends” the company is “observing from our perch” as the largest global servicer of exchange traded funds.



The percentage of respondents considering exposure to crypto ETFs is not surprising, he told Blockworks in an email.



“We continue to hear anecdotal evidence that many professional investors consider small allocations to cryptocurrency as an non-correlated asset class that makes sense in a portfolio,” Koudelka added. “Considering the recent run-up in bitcoin prices, there seems to be a growing interest to invest in cryptocurrency via the ETF structure.”



Though bitcoin is up about 64% year to date, its price has dropped roughly 10% in the past month.&nbsp;



Bryon Lake, head of ETF solutions at JPMorgan Asset Management, said the ETF vehicle is a great way to access thematic investment strategies and to diversify holdings. Investor feedback and demand is a main driver of the firm’s product development discussions, he added.



“But since our active engines are currently not focused on crypto, I’d say [offering crypto ETFs] is not something I see happening in the near future,” Lake told Blockworks.



The surveyed allocators are still most focused on the two biggest assets. When asked which ones they are invested in or could look to allocate to in the future, 59% said bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) and 49% said ether (<a href="https://blockworks.co/price/eth">ETH</a>).&nbsp;



Though the SEC has not yet approved an ETF that would invest in bitcoin directly, the securities regulator <a href="https://blockworks.co/news/first-bitcoin-futures-etf-nears-1b-on-first-day-of-trading">allowed bitcoin futures ETFs</a> to hit the market in October 2021.



Fund groups continue seeking new types of crypto products, such as Grayscale Investments, which filed last week for <a href="https://blockworks.co/news/grayscale-angling-for-crypto-etfs">three new ETFs</a>.&nbsp;



Its planned Grayscale Global Bitcoin Composite ETF would invest in ETPs “listed on major non-US exchanges” that hold or are backed by physical bitcoin — and bitcoin mining companies too.



NEOS, a firm focused on options-based income ETFs, <a href="https://www.sec.gov/Archives/edgar/data/1848758/000138713123006484/neos-485apos_051223.htm">filed</a> on Friday to launch a Bitcoin High Income ETF — an actively managed fund that would employ a bitcoin futures call options strategy.



Grayscale, <a href="https://blockworks.co/news/issuers-piggyback-on-grayscale-proposal">along with other asset managers</a> like Bitwise Asset Management, Direxion and Roundhill Investments, are also seeking to launch products that would give investors exposure to ether futures contracts.



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Most Pro Investors Not Invested in Crypto, but About Half Consider Entrance Via ETPs

The assets managed by crypto ETPs rose 67% during the first quarter of 2023, outpacing the sector’s overall market capitalization gains during the three-month span.&nbsp;



Total assets under management (AUM) in such products totaled $33.3 billion, as of March 31 — up from $20 billion at the end of the prior quarter, according to <a href="https://www.fineqia.com/article?id=122630">analysis</a> by digital asset business Fineqia.



Meanwhile, crypto’s market value increased by 50% in the first three months of 2023, from $800 billion to nearly $1.2 trillion.&nbsp;



In March alone, crypto ETP AUM increased 17% from $28.3 billion, higher than the 11% rise in the segment’s asset prices from nearly $1.1 trillion during the same month.



The research analyzed publicly available data for 160 ETPs — including ETFs and exchange-traded notes, the latter of which are unsecured debt securities that track an index. It also included trusts by Grayscale Investments traded publicly on the OTCQX.



Fineqia International CEO Bundeep Rangar said the price fluctuations of ETPs’ underlying assets impacted their assets under management much more than inflows or outflows.



Data by CoinShares <a href="https://blog.coinshares.com/volume-124-digital-asset-fund-flows-weekly-report-85c669f9a6d8">showed</a> year-to-date flows into digital asset investment products were slightly negative, at $19 million as of March 27.&nbsp;&nbsp;



“During Q1, BTC and ETH ETPs grew exactly the same as the underlying, highlighting no net inflow but at the same time showing how these products have become a reliable exposure to crypto assets, which is perhaps the ultimate goal for its investors,&#8221; Rangar told Blockworks.



As for the crypto ETP AUM growth outpacing price increases across the broader crypto market, this was due to the high concentration of bitcoin and ether in such funds. The prices of <a href="https://blockworks.co/price/btc">BTC</a> and <a href="https://blockworks.co/price/eth">ETH</a> increased 71% and 52%, respectively, during the first quarter, Fineqia’s data showed.&nbsp;



While ETPs holding BTC and ETH jointly accounted for 93% of digital asset ETP AUM, the market capitalization of these two assets make up about 63% of crypto’s market value.&nbsp;



“The dominance of BTC in the crypto market is about 48%, while in ETPs, BTC represents about 66% of the total market,” Rangar said. “<a href="https://blockworks.co/news/bitcoin-price-quarter-omen">BTC dominance grew significantly</a> during Q1, and given its high weighting among ETPs, its growth outpaced the others.&#8221;



Assets under management for Grayscale’s Bitcoin Trust (GBTC) and its Ethereum Trust (ETHE) grew by about $3.3 billion and $710 million last quarter, respectively, according to Fineqia. ProShares’ Bitcoin Strategy ETF (BITO) followed, seeing asset growth of roughly $160 million over that span.



Rangar added that the Federal Reserve’s decision to ease monetary policy in the US has helped crypto AUM growth so far this year following rising interest rates in 2022. He suggested that this has led investors to stray from assets deemed to be risky.



The Fed opted to <a href="https://blockworks.co/news/federal-reserve-raises-interest-rates-25-bps">raise interest rates by 25 basis points</a> in February, and did so <a href="https://blockworks.co/news/federal-reserve-interest-rate-25-bps-march">again in March</a>. These bumps were smaller than previous hikes of 0.5% and 0.75% throughout last year.&nbsp;&nbsp;



“With inflation being pared since September and the pace of rate hikes declining over the last few months, investors have brought more liquidity in the markets,” Rangar said. “Digital assets have consequently benefited as top performers.&#8221;



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Crypto ETP AUM Rise Outpaced Segment’s Price Growth in Q1 — Here’s Why

<div id="highlights-block_62fc048890a1a" class="highlights">
 <ul>
 <li>Dubai’s crypto-friendly frameworks and young entrepreneurs makes it an exciting region to expand, 21Shares exec says</li>
 <li>Firm’s other new hires previously worked at Barclays and JPMorgan</li>
 </ul>
 
</div>



Crypto ETP issuer <a href="https://21shares.com/en-us/" target="_blank" rel="noreferrer noopener">21Shares</a> has brought aboard several executives tasked with helping the company grow in various European countries and expand to the Middle East.&nbsp;



<a href="https://www.linkedin.com/in/sherif-el-haddad-94a02647/" target="_blank" rel="noreferrer noopener">Sherif El-Haddad</a>, to be based in Dubai, will lead the firm’s expansion in the Middle East by introducing retail and institutional investors to the asset class while maintaining compliance with regional regulatory requirements.&nbsp;



Before joining Switzerland-based 21Shares, El-Haddad was head of asset management at Al Mal Capital. Prior to that, he was the managing partner of Pearl Capital Management and led the asset management division of EFG Hermes for 13 years.



Isabell Moessler, 21Shares&#8217; head of distribution for Europe, the Middle East and Africa, told Blockworks in an email that the firm is looking to provide all investors a way to buy, sell and short crypto through existing bank and brokerage accounts.



“Dubai’s supportive environment for crypto, paired with the city’s ability to attract young entrepreneurs who are passionate about new financial opportunities, is what excites us in beginning our entrance into the Middle East,” Moessler said.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“Broadly, the UAE is already laying the foundation for crypto regulatory infrastructure and its overlaying ecosystems, making the region all the more appealing for crypto exchanges and companies to be a part of,” she added.</blockquote>


<div class="wp-block-image">
<figure class="alignright size-full is-resized"><img loading="lazy" decoding="async" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/08/marina-baudean-1.png" alt="" class="wp-image-27304" width="250" height="250" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/08/marina-baudean-1.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/marina-baudean-1.png?w=150 150w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/marina-baudean-1.png?w=257 257w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/marina-baudean-1.png?w=261 261w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/marina-baudean-1.png?w=219 219w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/marina-baudean-1.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/marina-baudean-1.png?w=50 50w" sizes="auto, (max-width: 250px) 100vw, 250px" /><figcaption><a href="https://www.linkedin.com/in/marina-baud%C3%A9an/" target="_blank" rel="noreferrer noopener">Marina Baudéan</a></figcaption></figure></div>


Dubai <a href="https://cms.blockworks.co/dubai-is-the-latest-government-to-roll-out-crypto-law-set-up-regulator/" target="_blank" rel="noreferrer noopener">revealed its first cryptocurrency legislation</a> in March, and the emirate granted virtual asset licenses to <a href="https://cms.blockworks.co/ftx-granted-crypto-license-with-dubai-hq-in-sights/" target="_blank" rel="noreferrer noopener">FTX</a> and <a href="https://cms.blockworks.co/binance-granted-license-to-operate-in-dubai/" target="_blank" rel="noreferrer noopener">Binance</a> that month. Kraken also <a href="https://cms.blockworks.co/kraken-receives-abu-dhabis-first-virtual-asset-exchange-license/" target="_blank" rel="noreferrer noopener">revealed plans</a> to expand to the UAE in April, but opted for neighboring emirate Abu Dhabi.



<a href="https://cms.blockworks.co/crypto-com-secures-provisional-approval-to-open-crypto-exchange-in-dubai/" target="_blank" rel="noreferrer noopener">Crypto.com</a> and Hong Kong-based crypto custodian <a href="https://cms.blockworks.co/hex-trust-greenlit-for-virtual-asset-license-in-dubai/" target="_blank" rel="noreferrer noopener">Hex Trust</a> gained regulatory approval to conduct business in the region in June, and exchange <a href="https://cms.blockworks.co/okx-to-expand-in-uae-after-dubai-regulatory-approval/" target="_blank" rel="noreferrer noopener">OKX</a> and <a href="https://cms.blockworks.co/crypto-custodian-komainu-follows-exchanges-to-dubai/" target="_blank" rel="noreferrer noopener">Komainu</a> gained regulatory approval to operate in Dubai last month.&nbsp;



21Shares also revealed that <a href="https://www.linkedin.com/in/marina-baud%C3%A9an/" target="_blank" rel="noreferrer noopener">Marina Baudéan</a> joins the company as its head of France, Belgium and Luxembourg. She spent more than 15 years at Barclays, where she developed the bank’s cross-asset electronic trading platform, <a href="https://www.cib.barclays/markets/barx.html" target="_blank" rel="noreferrer noopener">BARX</a>, and more recently led the electronic rates distribution team in Europe, the Middle East and Africa.&nbsp;


<div class="wp-block-image">
<figure class="alignleft size-full is-resized"><img loading="lazy" decoding="async" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Oliver-Schafer-1.png" alt="" class="wp-image-27305" width="250" height="250" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Oliver-Schafer-1.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Oliver-Schafer-1.png?w=150 150w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Oliver-Schafer-1.png?w=257 257w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Oliver-Schafer-1.png?w=261 261w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Oliver-Schafer-1.png?w=219 219w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Oliver-Schafer-1.png?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/08/Oliver-Schafer-1.png?w=50 50w" sizes="auto, (max-width: 250px) 100vw, 250px" /><figcaption><a href="https://www.linkedin.com/in/oliver-sch%C3%A4fer-33235775/?originalSubdomain=de" target="_blank" rel="noreferrer noopener">Oliver Schäfer</a></figcaption></figure></div>


<a href="https://www.linkedin.com/in/oliver-sch%C3%A4fer-33235775/?originalSubdomain=de" target="_blank" rel="noreferrer noopener">Oliver Schäfer</a>, who previously worked at JPMorgan Asset Management for 15 years, according to his LinkedIn profile, will be the ETP (exchange-traded product) issuer’s head of Germany.



Schäfer replaces <a href="https://www.linkedin.com/in/marco-infuso/?originalSubdomain=ch" target="_blank" rel="noreferrer noopener">Marco Infuso</a>, who left 21Shares to lead global sales at competing firm Valour. Former 21Shares product manager Elaine Bühler and <a href="https://www.linkedin.com/in/petermaerkl/" target="_blank" rel="noreferrer noopener">Peter Märkl</a>, previously 21Shares’ head of legal, also jumped ship to Valour in recent weeks.&nbsp;



The hires and expansion plans come after 21Shares <a href="https://cms.blockworks.co/first-australian-spot-bitcoin-ether-etfs-to-go-live-next-week/" target="_blank" rel="noreferrer noopener">expanded its presence in Australia</a> in April by offering the continent’s first products to invest directly in bitcoin and ether. The firm more <a href="https://cms.blockworks.co/21shares-vying-to-build-out-crypto-winter-suite/" target="_blank" rel="noreferrer noopener">recently introduced</a> a so-called crypto winter product suite, <a href="https://cms.blockworks.co/21shares-expands-crypto-winter-product-lineup/" target="_blank" rel="noreferrer noopener">expanding it last month</a> to include risk-controlled bitcoin and ether index ETPs.



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21Shares

21Shares Adds Execs as Part of Global Expansion

<div id="highlights-block_62d7839ef1766" class="highlights">
 <ul>
 <li>The firm’s newest products allocate more assets to USD when bitcoin or ether volatility rises</li>
 <li>21Shares brought to market its Bitcoin Core ETP (CBTC) last month in response to the crypto market downturn</li>
 </ul>
 
</div>



Cryptocurrency-focused fund issuer <a href="https://cms.blockworks.co/tag/21shares/" target="_blank" rel="noreferrer noopener">21Shares</a> has introduced additional products vehicles designed for investors wary of the lingering bear market — focused on risk-managed exposure to the two largest digital assets.&nbsp;



The 21Shares S&amp;P Risk Controlled Bitcoin Index ETP (SPBTC) and the 21Shares S&amp;P Risk Controlled Ethereum Index ETP (SPETH) launched on the SIX Swiss Exchange, the company said Wednesday. 



The newest index-tracking products offer exposure to the respective assets, while targeting annual volatility of about 40%, via allocating more assets to USD when bitcoin or ether volatility rises, for example.



Both funds seek to replicate S&amp;P Dow Jones Indices’ benchmarks that control risk in a similar manner.&nbsp;



The financial services giant has been developing crypto indexing capabilities over the last two years “to help promote more transparency and facilitate access to this emerging technology-driven asset class,” Sharon Liebowitz, S&amp;P Dow Jones Indices’ senior director of innovation, said in a statement.&nbsp;



Bitcoin traded around $23,200 on Tuesday at 7 pm ET — up 13% in the past 30 days but down 66% from its all-time high last November. Ether stood at $1,530 at the time, a 36% jump from a month ago. The asset also peaked last November, hitting nearly $4,900.&nbsp;



“Although Bitcoin and Ethereum are two of the best performing asset classes of the decade,&nbsp; risk-averse investors are often wary of its price fluctuations,” Hany Rashwan, a 21Shares executive, told Blockworks. “We’re bringing down the volatility level on two of the most sought after cryptocurrencies, to make it more palatable for investors to enter the asset class comfortably and to give investors a smoother ride.”



The fresh listings come a few weeks after the company brought to market its <a href="https://cms.blockworks.co/21shares-vying-to-build-out-crypto-winter-suite/" target="_blank" rel="noreferrer noopener">Bitcoin Core ETP (CBTC)</a>, also in Switzerland — the initial product in its so-called crypto winter suite. Exchange-traded products (ETPs) are equivalent to ETFs in the US.&nbsp;



Rashwan dubbed the fund “the cheapest physically-backed ETP in the world” at the time.&nbsp;



CBTC is also set to lend a portion of the underlying crypto on a fully collateralized basis to offset operating costs once the product scales.&nbsp;



Rashwan said the firm is looking to roll out several additional products in the suite throughout the second half of the year.



“Our upcoming products will fulfill a variety of investor needs — whether that is offering ETPs at the lowest costs on the market for long-term strategic allocation, for shorter-term tactical allocation or in a more risk-controlled manner,” he said.



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21Shares Expands ‘Crypto Winter’ Product Lineup

<div id="highlights-block_62a1de3c35103" class="highlights">
 <ul>
 <li>Firm could look to bring crypto products focused on yield or volatility management, digital assets product head Adam Sze says</li>
 <li>Sze seeks to combine experience in traditional finance and crypto ETPs at the thematic ETF issuer</li>
 </ul>
 
</div>



A new head of digital asset products at Global X is hoping to bring his traditional finance and crypto ETP background to build out educational resources and add to the company’s thematic product lineup.



The New York-based fund group <a href="https://cms.blockworks.co/global-x-poaches-21shares-exec-to-lead-digital-assets-product-push/" target="_blank" rel="noreferrer noopener">brought aboard</a> Adam Sze last month from Swiss ETP (exchange-traded product) issuer 21Shares. Before that, he worked for more than a decade at New York Life Investments, including as the firm’s director of product development.&nbsp;



Sze began learning about crypto in late 2017, and though New York Life considered launching products within the space, he said, the company ultimately decided against it.



The executive jumped ship to 21Shares in August 2021 and spent the latter half of his 10-month tenure there as director of ETPs. Sze led the design, implementation and launch of more than a dozen physically-backed <a href="https://cms.blockworks.co/21-shares-expands-crypto-etps/" target="_blank" rel="noreferrer noopener">crypto ETPs</a> for the company, which manages more than $2 billion in assets.



“At 21Shares, I was able to combine my professional pursuits and my personal interests into a single role…I learned a lot about structuring digital asset products and also got a deeper education in the space,” he told Blockworks. “Now that I’m at Global X, I have the opportunity to get even more involved in the strategic planning and implementation for the firm’s digital asset initiative.”



Global X has 93 ETFs trading in the US with combined assets of roughly $40 billion, according to ETF.com. Its Global X Blockchain ETF (BKCH), which tracks a market cap-weighted index of companies in the blockchain space, launched last July and has about $60 million in assets.



The firm brought to market its Blockchain and Bitcoin Strategy ETF (BITS), which blends investments in crypto stocks and bitcoin futures contracts, last November. That actively managed fund oversees about $10 million.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“While it’s nice to have single-asset ETPs…I think where we’re truly going to make an impact and make a win is bringing out innovative solutions that address specific client needs, whether that’s yield or volatility management,” Sze said.&nbsp;</blockquote>



In addition to addressing such needs, the company seeks to offer exposure to certain sectors of the digital asset space through index-based products, though Sze declined to share specific segments the firm could target.&nbsp;



Matt Hougan, Bitwise Asset Management&#8217;s chief investment officer, noted during a panel at last month’s Permissionless event that he expects the share of indexing in the crypto space to rise from below 1% to 20% or 30% in the next 10 years.



Despite a focus on index-based products, Global X is mulling whether to re-apply for its proposed spot bitcoin ETF, Sze said, which the SEC rejected earlier this year.



Sze added that education is paramount for increasing adoption of digital asset investment products. While Global X aims to bolster its thought leadership to help financial advisers educate their clients on the space, the firm also intends to make its research available to retail investors.



The ongoing downturn in crypto markets won’t impact how Global X thinks about new crypto products, Sze said. Still, he explained, the drawdown — coupled with macro headwinds such as elevated inflation, rising interest rates, and supply chain issues — could affect the adoption timeline of such offerings.



“I think in the near term, there’s likely going to be muted interest in not only digital assets but risk assets as a whole as investors flock to safety,” he said. “But longer term, I think digital assets remain very compelling.”



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Global X Plots Expansion of Crypto Products, Research

Sebastian Sinclair

<div id="highlights-block_626ac81083669" class="highlights">
 <ul>
 <li>The firm&#8217;s Nasdaq Crypto Index Europe ETP will trade on the SIX Swiss Exchange</li>
 <li>The product which will track the performance of bitcoin, cardano and ether, among others</li>
 </ul>
 
</div>



Crypto asset manager Hashdex has branched into the European market for the first time with its latest ETP that tracks an underlying basket of cryptocurrencies. 



The Brazillian firm&#8217;s Nasdaq Crypto Index Europe ETP (exchange-traded product) will trade on the SIX Swiss Exchange under the ticker symbol SIX: HASH SW, beginning May 2, according to a Thursday <a href="https://www.globenewswire.com/news-release/2022/04/28/2431733/0/en/Hashdex-Announces-Launch-of-the-Hashdex-Nasdaq-Crypto-Index-Europe-ETP.html" target="_blank" rel="noreferrer noopener">statement</a>. 



It marks the manager&#8217;s first product available for European investors, a spokesperson confirmed to Blockworks. &#8220;The launch of HASH SW is a natural next step in Hashdex’s commitment to serving the region,&#8221; the spokesperson added.



Asset managers <a href="https://cms.blockworks.co/21shares-combines-bitcoin-and-gold-in-newest-etp/" target="_blank" rel="noreferrer noopener">continue</a> to roll out crypto-related exchange products and funds despite stalled upward market performance in recent months. Some managers are even seeking to launch products that take advantage of the trend reversal — including proposals for <a href="https://cms.blockworks.co/issuers-race-to-launch-a-short-bitcoin-futures-etf/" target="_blank" rel="noreferrer noopener">ETFs that short bitcoin</a>.



Hashdex&#8217;s latest product tracks the performance of Nasdaq&#8217;s Crypto Index Europe (NCIE) which, in turn, tracks the showings of avalanche, bitcoin, cardano, ether, litecoin, polkadot, polygon and solana.



Hashdex and Nasdaq previously co-developed the Nasdaq Crypto Index. The NCIE is an extension of the effective methodology established by the NCI and has been tweaked to conform to eligibility requirements of European exchanges.



Ahead of its first ETP for the European market, Hashdex <a href="https://cms.blockworks.co/brazilian-cryptoasset-manager-poaches-exec-to-lead-european-expansion/" target="_blank" rel="noreferrer noopener">recently hired</a> its inaugural managing director and head of Europe, Laurent Kssis, in March. 



Kssis was formerly global head of ETPs at Swiss manager 21Shares, where he brought to market more than 25 crypto ETPs across several European regulated exchanges.



&#8220;We believe with this index and subsequently delivering this institutional-grade ETP, we have represented exactly what investors have been demanding by offering a product with diversified exposure that mitigates risk in cryptoassets,&#8221; Kssis said.



In February&nbsp;2021, Hashdex&nbsp;launched the Hashdex Nasdaq Crypto ETF&nbsp;(HDEX), which tracks the Nasdaq Crypto Index on the Bermuda Stock Exchange.&nbsp;The Hashdex Nasdaq Crypto ETF became the&nbsp;world’s first crypto-based ETF&nbsp;and&nbsp;is currently available on the BSX to accredited non-US investors.&nbsp;



Seeking to leverage Hashdex&#8217;s momentum, the first bitcoin futures ETF in the US to gain the SEC&#8217;s blessing under the Securities Act of 1933&nbsp;may be seeking a <a href="https://cms.blockworks.co/teucrium-bitcoin-futures-etf-now-carries-hashdex-brand/" target="_blank" rel="noreferrer noopener">name change</a> from Teucrium Bitcoin Futures Fund to Hashdex Bitcoin Futures ETF.



It&#8217;s unclear what role Hashdex will play, though Bloomberg Intelligence ETF Analyst Eric Balchunas said last week the name change could signal a partnership similar to that between Ark Invest and 21Shares.&nbsp;



In April 2021 Hashdex&nbsp;<a href="https://www.b3.com.br/en_us/news/b3-begins-trading-the-first-hashdex-etf.htm" target="_blank" rel="noreferrer noopener">launched</a>&nbsp;another version of its flagship fund, the Hashdex Nasdaq Crypto ETF, on Brazil’s B3 exchange. Hashdex followed up by partnering with Nasdaq and Victory Capital in August to&nbsp;<a href="https://www.businesswire.com/news/home/20210804005624/en/Victory-Capital-Launches-Crypto-Index-Fund-for-U.S.-Accredited-Investors">launch</a>&nbsp;a private fund tracking the performance of a basket of USD-traded cryptos available to US accredited investors.



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Hashdex Expands Offerings to Europe With Latest Crypto ETP

<div id="highlights-block_6215583a9ca28" class="highlights">
 <ul>
 <li>Uniswap (UNI) makes up a third of the index, while Aave (AAVE), SushiSwap (SUSHI) and Loopring (LRC) each exceed 10%</li>
 <li>Compass Financial Technologies plans to launch thematic, volatility, options-based and multi-asset indices in 2022</li>
 </ul>
 
</div>



A Swiss index provider has launched an index offering exposure to 10 DeFi tokens as crypto investment vehicles continue to proliferate.



<a href="https://www.compassft.com" target="_blank" rel="noreferrer noopener">Compass Financial Technologies</a>’ indices have about $5 billion of assets and are tracked by ETPs across Europe.



Appetite for digital asset exposure through institutional-quality solutions is growing significantly, CEO Guillaume Le Fur told Blockworks.



“We have clearly identified the DeFi [theme] as one of the fastest growing sectors in the crypto industry, and the index is designed to offer broad and dynamic exposure to this sector,” Le Fur said.



The index is the first such institutional product that determines weightings by tracking token liquidity and revenue produced by DeFi (decentralized finance) protocols via on-chain data, according to the firm.&nbsp;



The largest allocation is to Uniswap (UNI), with a weighting of roughly 33%. Aave (AAVE), SushiSwap (SUSHI) and Loopring (LRC) each exceed 10%.



<div class="wp-block-image"><figure class="aligncenter size-large"><img loading="lazy" decoding="async" width="1024" height="605" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/02/Compass-DeFi-Index-allocation-1024x605.jpg" alt="" class="wp-image-17770" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/02/Compass-DeFi-Index-allocation-1024x605.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/Compass-DeFi-Index-allocation-1024x605.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/Compass-DeFi-Index-allocation-1024x605.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/Compass-DeFi-Index-allocation-1024x605.jpg?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/Compass-DeFi-Index-allocation-1024x605.jpg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/Compass-DeFi-Index-allocation-1024x605.jpg?w=442 442w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/Compass-DeFi-Index-allocation-1024x605.jpg?w=370 370w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/Compass-DeFi-Index-allocation-1024x605.jpg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/Compass-DeFi-Index-allocation-1024x605.jpg?w=50 50w, https://blockworks-co.imgix.net/wp-content/uploads/2022/02/Compass-DeFi-Index-allocation-1024x605.jpg?w=1854 1854w" sizes="auto, (max-width: 1024px) 100vw, 1024px" /><figcaption>Compass Financial Technologies&#8217; DeFi index allocation</figcaption></figure></div>



The index can be used under a license agreement by issuers in any country, subject to local regulations. It is compliant with EU Benchmarks Regulation and is live on Bloomberg, as well as Refinitiv.



The launch comes as crypto offerings continue to <a href="https://cms.blockworks.co/with-us-bitcoin-etf-in-limbo-crypto-exchange-traded-products-all-the-rage-in-europe/" target="_blank" rel="noreferrer noopener">multiply in Europe</a>.



Compass partnered with CoinShares in June 2020 to create the CoinShares Gold and Cryptoassets Index (CGCI) — the first EU Benchmarks Regulation-compliant index that combines crypto and gold.



CoinShares more recently <a href="https://cms.blockworks.co/coinshare-launches-new-etps/" target="_blank" rel="noreferrer noopener">launched two crypto ETPs</a> (exchange-traded products) designed to share staking rewards with investors. <a href="https://cms.blockworks.co/wisdomtree-launches-spot-etps-in-europe/" target="_blank" rel="noreferrer noopener">WisdomTree</a> and 21Shares have continued bringing crypto ETPs to the European market, <a href="https://cms.blockworks.co/21-shares-expands-crypto-etps/" target="_blank" rel="noreferrer noopener">with the latter</a> planning to support what it considers the top 50 cryptocurrencies by the end of the year.



“2022 should be an important year for us in terms of index offerings, with new thematic basket indices, volatility, options-based indices and multi-asset indices,” Le Fur said.



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Compass Financial

Switzerland-based Index Provider Offers DeFi Exposure

Casey Wagner

<div id="highlights-block_62151df97e59a" class="highlights">
 <ul>
 <li>The company defended its fees, saying they’ll remain unchanged, as assets and revenues ballooned</li>
 <li>“Everyone is doing an ETP today — everyone wants to do one,” a CoinShares executive said</li>
 </ul>
 
</div>



Thanks to explosive demand for digital asset investment products, European cryptocurrency asset manager CoinShares <a href="https://coinshares.com/investor-relations" target="_blank" rel="noreferrer noopener">notched</a> its highest quarterly earnings and assets under management Tuesday.



CoinShares <a href="https://coinshares.com/investor-relations/reports-portal/quarterly-reports#q1-2021-earnings" target="_blank" rel="noreferrer noopener">reported</a> a 1.6 billion pound, nearly $2.2 billion, year-over-year increase in ETP (exchange-traded product) assets under management between the fourth quarter of 2020 and the fourth quarter of 2021. The asset manager’s total comprehensive income for 2021 was 114.3 million pounds, or $155.4 million, up from 18.6 million pounds in 2020.



“Due to the correlation with digital asset prices and the all-time highs that we&#8217;ve experienced over the year, our products have benefited significantly,” Richard Nash, CoinShares’ chief financial officer, said on Tuesday’s earnings call.&nbsp;



CoinShares’ ETPs generated 78.5 million pounds, or $106.7 million, in fees during the fourth quarter. The asset manager has already launched new ETPs this quarter, including the first such product with staking rewards built on the Tezos and Polkadot blockchains.



CoinShares is not the only asset manager profiting from the <a href="https://cms.blockworks.co/with-us-bitcoin-etf-in-limbo-crypto-exchange-traded-products-all-the-rage-in-europe/" target="_blank" rel="noreferrer noopener">growing interest</a> in digital asset ETPs.



Fidelity International became <a href="https://cms.blockworks.co/21-shares-expands-crypto-etps/" target="_blank" rel="noreferrer noopener">the latest</a> issuer to offer a European ETP earlier this month with the launch of its Fidelity Physical Bitcoin ETP (FBTC) on Germany’s Deutsche Börse Xetra — the cheapest such European ETP. 21Shares, the world’s largest crypto ETP issuer, launched <a href="https://cms.blockworks.co/21-shares-expands-crypto-etps/" target="_blank" rel="noreferrer noopener">three new decentralized finance (DeFi)</a> products in recent weeks.



Asked about competition, CoinShares executives acknowledged that the space is crowded.&nbsp;



“Everyone is doing an ETP today — everyone wants to do one,” Jean-Marie Mognetti, CoinShares’ CEO, said. “I&#8217;m cognizant of the competition, and I welcome it because it&#8217;s much easier for CoinShares to show how good we are at doing what we&#8217;re doing when there are more people than one.”



Growing competition will not impact CoinShares’ current fee structure, at least for now, Mognetti added.



“I don&#8217;t think we are in a position where we have to drop off fees. You are not buying CoinShares and just CoinShares’ products, you&#8217;re buying CoinShares for the brand name,” Mognetti said. “It’s an all-in price…you’re buying the expertise.”



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CoinShares

CoinShares Latest To Benefit From Booming Interest in European Crypto Products

<div id="highlights-block_620e9515e4909" class="highlights">
 <ul>
 <li>SEC Chair Gary Gensler said his agency must consider whether a spot bitcoin ETF is designed to prevent fraudulent and manipulative acts and practices</li>
 <li>Nearly 100 people have so far weighed in on Grayscale Investments’ proposed conversion of its Bitcoin Trust to an ETF in public comments to the SEC</li>
 </ul>
 
</div>



As the Securities and Exchange Commission refuses to budge on signing off on a spot bitcoin ETF, a growing number of industry participants are urging the regulator to reconsider.



The latest battleground: Grayscale Investments’ proposal to convert its bitcoin trust to an ETF (exchange-traded fund). <a href="https://cms.blockworks.co/grayscale-files-to-convert-its-bitcoin-trust-into-an-etf/" target="_blank" rel="noreferrer noopener">The firm filed</a> to morph the $28-billion Grayscale Bitcoin Trust (GBTC) to an ETF in October after the first bitcoin futures ETF <a href="https://cms.blockworks.co/first-bitcoin-futures-etf-nears-1b-on-first-day-of-trading/" target="_blank" rel="noreferrer noopener">began trading</a>.



During the SEC’s 240-day review period, which expires in July, the agency is soliciting feedback from the public.



Andrew Farinelli, a private wealth advisor at Embree Financial, wrote to the SEC that the conversion would reduce costs and improve security for bitcoin investors. Chicago-based Embree, which has 85 institutional clients and 300 families, runs about $1.5 billion.



“Their accounts and investment would often be fully protected under the FDIC, it would be custodied at a trusted institution — [such as] Charles Schwab — and investment itself would be safer under the SEC’s regulation of ETFs,” Farinelli wrote. “Lastly…this allows investment professionals like myself to provide the best guidance to their clients and investors at large.”&nbsp;



SEC Chair Gary Gensler, meanwhile, has given bitcoin ETF hopefuls little reason for optimism. In his latest public comment, Gensler wrote a <a href="https://pbs.twimg.com/media/FLzxM5gUUAsyQOt.jpg" target="_blank" rel="noreferrer noopener">letter</a> Tuesday to US Rep. Tom Emmer, R-Minn., saying the “different holdings” of bitcoin spot and futures products have led to “different regulatory outcomes.” Gensler is “technology-neutral” on the outcome, he wrote.



“When reviewing bitcoin spot ETPs, the commission must apply all the standards of the Exchange Act, which it has followed in connection with its orders considering previous proposals to list bitcoin spot ETPs,” Gensler wrote. “In particular, the commission must consider if the bitcoin spot ETP proposal is designed to prevent fraudulent and manipulative acts and practices.”



The letter followed a November dispatch to Gensler from Emmer and Rep. Darren Soto, D-Fla., saying the agency’s approval of a futures ETF should equate to a greenlight for a spot product.



“We do not understand the SEC’s views around the perceived material difference in risk profiles, since both the futures and spot bitcoin markets are inherently intertwined and bear the same risks regarding fraud and manipulation,” Emmer and Soto wrote.



The stakes are rising. <a href="https://cms.blockworks.co/financial-advisors-bullish-on-crypto/" target="_blank" rel="noreferrer noopener">A survey last month</a> found that the percentage of financial professionals investing client funds in crypto rose from 9% to 15% over the past year. 



Sixty percent cited regulatory concerns as preventing them from making their first or increasing their crypto allocation, while 32% noted the lack of easily accessible investment vehicles, such as ETFs.



The argument of industry powerhouses such as Coinbase is that a spot ETF would lead to an expansion of safe retail investment in bitcoin.



Paul Grewal, chief legal officer at Coinbase, also wrote a letter in support of the conversion in December.&nbsp;



“We believe investors should have access to GBTC in an ETP format because it offers a tried and tested way for retail investors to gain exposure to bitcoin at prices that closely reflect spot Bitcoin trading prices without holding it themselves,” Grewal wrote.



Grewal joined more than <a href="https://www.sec.gov/comments/sr-nysearca-2021-90/srnysearca202190.htm" target="_blank" rel="noreferrer noopener">100 people </a>in writing, with the majority in support of the Grayscale conversion.



“This issue remains a priority for us and we will continue to oversee the SEC in its mission to maintain fair and orderly markets and facilitate capital formation,” Emmer wrote in a Thursday Twitter post.



A spokesperson for Emmer did not immediately return a request for further comment. 



The recent flood of public comments comes after attorneys representing Grayscale Investments <a href="https://cms.blockworks.co/grayscale-attorneys-argue-sec-for-spot-bitcoin-etf-approval/" target="_blank" rel="noreferrer noopener">called the agency’s decision</a> to approve a futures-based fund and not a spot ETF “arbitrary and capricious.”



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Darren Soto

Support for Spot Bitcoin ETF Revs Up as Agency Holds Course

<div id="highlights-block_620bd47379bfc" class="highlights">
 <ul>
 <li>Since 1980 the firm has operated independently of US-based Fidelity Investments, which still seeks to launch a spot bitcoin ETF</li>
 <li>Fidelity International’s bitcoin ETP began trading in Germany on Tuesday and is expected to launch in Switzerland in the coming weeks</li>
 </ul>
 
</div>



Another bitcoin exchange-traded product carrying the Fidelity name has launched — just not the one some US investors are waiting for.



Bermuda-based Fidelity International, which manages roughly $800 billion in client assets, is launching the Fidelity Physical Bitcoin ETP (FBTC) for its professional and institutional clients in Europe.



Once a subsidiary of US-based Fidelity Investments, Fidelity International has operated independently of the company since 1980.



The offering began trading on the Deutsche Börse Xetra in Germany Tuesday, according to the firm, and is expected to begin trading on the SIX Swiss Exchange in the coming weeks. FBTC will cost investors 75 basis points.



Distributed ledger technology has the potential to revolutionize the financial system and disrupt many parts of the financial world, with profound implications for investors, Fidelity International Managing Director Christian Staub said in a statement.



“We are initially providing investors access to the world’s largest cryptocurrency, bitcoin, but we constantly review our product range and will consider further products and services, subject to client demand,” a Fidelity International spokesperson told Blockworks in an email.



Fidelity Digital Assets, a company that Fidelity Investments launched in 2018, serves as custodian of the Fidelity Physical Bitcoin ETP.



A Fidelity Digital Assets survey published last year found that roughly 90% of institutional investors interested in digital assets expect to have an allocation to the space within the next five years.



Fidelity Investments’ Canadian subsidiary <a href="https://cms.blockworks.co/fidelity-set-to-launch-spot-bitcoin-etf-in-canada/" target="_blank" rel="noreferrer noopener">launched</a> an ETF in December that invests directly in bitcoin.



Despite the slew of spot crypto ETP launches abroad in recent months, the Securities and Exchange Commission has not yet approved a spot crypto ETF in the US. The agency <a href="https://www.sec.gov/rules/sro/cboebzx/2022/34-94080.pdf" target="_blank" rel="noreferrer noopener">denied</a> Fidelity Investments’ Wise Origin Bitcoin Trust last month.



“We reaffirm our belief in market readiness for a physical bitcoin exchange traded product and look forward to continued constructive dialogue with the SEC,” a spokesperson told Blockworks at the time.



As it awaits approval for its US spot bitcoin product, Fidelity Investments — with nearly $4.5 trillion of discretionary assets as of Dec. 31 — <a href="https://cms.blockworks.co/fidelity-plots-crypto-etfs/" target="_blank" rel="noreferrer noopener">filed for a pair of ETFs</a> that would invest in companies involved in the metaverse and the broader crypto industry.



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Fidelity International Enables Direct Investment in Bitcoin

<div id="highlights-block_61f9f54c6d429" class="highlights">
 <ul>
 <li>A new exchange traded product that tracks the price of Solana&#8217;s native crypto has begun trading on the German exchange Boerse Frankfurt Zertifikate AG under the identification number A3GU9Y</li>
 <li>The ETP provides traditional investors exposure to the crypto within a regulated and &#8220;fully backed&#8221; environment</li>
 </ul>
 
</div>



A subsidiary of crypto firm DeFi Technologies has been given the green light by the Boerse Frankfurt Zertifikate AG to list an exchange-traded product (ETP) that tracks the price of Solana&#8217;s native crypto (SOL).



Valour&#8217;s Solana ETP began trading Tuesday under the German securities identification number A3GU9Y, according to a press release on Monday. The ETP directly tracks the price of SOL by calculating the arithmetic mean price from major crypto exchanges. 



A listing such as this gives traditional investors a means to edge their way into the crypto industry by alleviating certain risk concerns due to the exchange&#8217;s regulated structure.



Claiming to be &#8220;fully backed at all times,&#8221; Valour said it achieves this by purchasing or selling an equivalent amount of the underlying for every Valour ETP that is bought and sold on the Boerse or another exchange.



The product provides an investor exposure to SOL that can be bought directly from their bank or broker. ETPs are financial products that invest in or provide exposure to a variety of securities and are traded on an exchange.



A reference price for the Solana ETP is set by using the average price of the underlying SOL/USD from the four most liquid exchanges on the market. The dollar value of SOL/USD is then calculated into euros, according to a market <a href="https://assets.ctfassets.net/l61jgzfj46lz/4tHKl3nMBkF6mY1x6K9rSe/45a0259313bfbe0483f1915b3cd5158d/SOL-EUR-Factsheet-EN.pdf" target="_blank" rel="noreferrer noopener">fact sheet</a>.



The listing extends Valour&#8217;s recently launched <a href="https://cms.blockworks.co/metaverse-etp-gains-approval-in-europe/" target="_blank" rel="noreferrer noopener">Metaverse and Gaming Index ETP</a> that tracks the top five digital assets related to the virtual world. Indeed, Europe appears to be making significant headway ahead of other regions in crypto ETP listings, following <a href="https://cms.blockworks.co/coinshares-expands-reach-of-bitcoin-ether-etps/" target="_blank" rel="noreferrer noopener">multiple companies&#8217;</a> products on various exchanges around the continent.



&#8220;We look forward to continuing to provide investors access to industry-leading ETP&#8217;s on regulated exchanges throughout Europe,&#8221; said Defi Technologies CEO Russell Starr. &#8220;We also look forward to introducing several new products in the coming days and ultimately launching all our products on the Euronext exchange, the fourth largest exchange in the world.&#8221;


[stock_market_widget type=&#8221;inline&#8221; template=&#8221;generic&#8221; assets=&#8221;SOL-USD&#8221; markup=&#8221;{name} ({symbol}) is trading at {price} ({change_pct}).&#8221; display_currency_symbol=&#8221;true&#8221; api=&#8221;yf&#8221;]






[stock_market_widget type=&#8221;accordion&#8221; template=&#8221;chart&#8221; color=&#8221;#5679FF&#8221; assets=&#8221;SOL-USD&#8221; start_expanded=&#8221;true&#8221; display_currency_symbol=&#8221;true&#8221; api=&#8221;yf&#8221; chart_range=&#8221;1mo&#8221; chart_interval=&#8221;1d&#8221;]



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DeFi

DeFi Technologies Subsidiary Gets Nod to List Solana ETP on Frankfurt Exchange

<div id="highlights-block_61f97af204c68" class="highlights">
 <ul>
 <li>21Shares manages more than $2 billion in 26 cryptocurrency ETPs and 87 listings across 10 European and Swiss exchanges</li>
 <li>The firm plans to feature dozens more cryptocurrencies in ETPs by year-end</li>
 </ul>
 
</div>



21Shares, the world’s largest issuer of crypto exchange-traded products (ETPs), has launched three more such products in Switzerland as the firm looks to expand its offerings this year.&nbsp;



The company&#8217;s new ETPs, which launched on the BX Swiss exchange, have <a href="https://aave.com" target="_blank" rel="noreferrer noopener">Aave</a> (AAVE), <a href="https://chain.link" target="_blank" rel="noreferrer noopener">Chainlink</a> (LINK) and <a href="https://uniswap.org" target="_blank" rel="noreferrer noopener">Uniswap</a> (UNI) as their underlying assets. The offerings carry a fee of 250 basis points.&nbsp;



Each offers performance directly linked to the asset without leverage. 21Shares holds the underlying crypto assets in cold storage.



Aave allows users to borrow assets and earn interest on deposits, while Chainlink enables smart contracts to create efficient blockchains for real-time data and computation. Decentralized crypto exchange Uniswap offers a protocol that delivers liquidity and trading for tokens on the Ethereum blockchain.



“DeFi is clearly a theme of great interest and activity in crypto and these three assets are some of the largest and best known infrastructural pieces underpinning a lot of DeFi activities,” Hany Rashwan, CEO and co-founder of 21Shares, told Blockworks. “These three assets are among the best of the space, offering loans, oracle and exchange infrastructure that is absolutely vital for the space to continue growing.”



LINK’s market capitalization was about $8 billion Tuesday afternoon, which was the 21st-highest among coins, according to CoinGecko. The market caps of UNI and AAVE are roughly $5.1 billion and $2.2 billion, respectively.



21Shares <a href="https://21shares.com" target="_blank" rel="noreferrer noopener">manages</a> more than $2 billion in 26 cryptocurrency ETPs and 87 listings. Its products are listed on 10 regulated European and Swiss trading exchanges.



The firm currently offers 18 single-asset tracker ETPs. Its bitcoin and ether ETPs launched in February 2019 and March 2019, respectively.



Rashwan said lots of “very innovative projects across every crypto vertical” are not yet supported by ETPs, noting the firm aims to support what the firm considers the top 50 cryptocurrencies by the end of the year. 



The firm evaluates new listings based on trading metrics, its team, investors, community and social reach, among other factors. The CEO declined to share specific assets 21Shares is considering for ETPs.



The company also anticipates listing additional indexes and more specialized products, such as its Short Bitcoin ETP, which borrows BTC and simultaneously sells it to create short exposure.



21Shares’ latest products follow its <a href="https://cms.blockworks.co/21shares-crypto-etp-in-europe-excludes-btc-and-eth/" target="_blank" rel="noreferrer noopener">launch of a Crypto Mid-Cap Index ETP</a> in December.&nbsp; Tracking an index that excludes bitcoin and ether, the product’s largest holding at the time of launch was binance coin (BNB), with a nearly 31% weighting.


[stock_market_widget type=&#8221;accordion&#8221; template=&#8221;chart&#8221; color=&#8221;#5679FF&#8221; assets=&#8221;AAVE-USD,BNB-USD,LINK-USD,UNI-USD&#8221; start_expanded=&#8221;false&#8221; display_currency_symbol=&#8221;true&#8221; api=&#8221;yf&#8221; chart_range=&#8221;1mo&#8221; chart_interval=&#8221;1d&#8221;]



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