Ben Strack

<div id="highlights-block_6272b2c2abd98" class="highlights">
 <ul>
 <li>Firm expects “a more thematic approach to digital assets” to continue as investors look beyond BTC, ETH</li>
 <li>Competitor 21Shares has launched similar products this year</li>
 </ul>
 
</div>



CoinShares has launched two more crypto ETPs in Germany, bringing the firm’s total ETP (exchange-traded product) launches this year to seven.&nbsp;



The Physical Chainlink and Physical Uniswap ETPs are listed on Germany&#8217;s main market Xetra, the company announced Wednesday. They each carry a management fee of 1.5%.



CoinShares Chief Revenue Officer Frank Spiteri said in a statement that investors have gained interest in digital assets beyond bitcoin and ethereum as the sector has evolved.



“A more thematic approach to digital assets is emerging amongst those most familiar with crypto, and we expect that trend to continue as research and investor education improves,” he said.



A CoinShares spokesperson didn’t immediately return a request for further comment.&nbsp;



Oracle protocol Chainlink is designed to bridge real-world information to the smart contracts running on a blockchain platform. Its native currency, LINK, has a market capitalization of roughly $5 billion, according to data compiled by Blockworks.



An alternative to centralized exchanges, Uniswap allows users to either trade or provide the liquidity that supports trading activities within its application. Uniswap (UNI) has a market cap of roughly $3.2 billion.&nbsp;&nbsp;



CoinShares manages roughly $3.3 billion in assets. After a <a href="https://cms.blockworks.co/coinshares-latest-to-benefit-from-booming-interest-in-european-crypto-products/" target="_blank" rel="noreferrer noopener">record fourth quarter</a> that saw the company notch its highest quarterly earnings and assets under management, its executives on Tuesday <a href="https://cms.blockworks.co/coinshares-q1-earnings-slide-retail-remains-focus-execs-say/" target="_blank" rel="noreferrer noopener">reported a slide</a> last quarter.



The launches follow the firm last week <a href="https://coinshares.com/news/coinshares-and-ftx-physical-ftx-token-etp" target="_blank" rel="noreferrer noopener">bringing to Xetra</a> a physically-backed FTX Token ETP in partnership with the crypto exchange. The product had seed capital of roughly $40 million.



Others have launched similar products in recent months. 



Competitor 21Shares <a href="https://cms.blockworks.co/21-shares-expands-crypto-etps/" target="_blank" rel="noreferrer noopener">launched ETPs</a> with LINK and UNI as underlying assets in February, as crypto ETPs <a href="https://cms.blockworks.co/coinshares-latest-to-benefit-from-booming-interest-in-european-crypto-products/" target="_blank" rel="noreferrer noopener">continue to proliferate</a> in Europe. 21Shares added products focused on FTX Token (FTT) and Decentraland (MANA) that same month.



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CoinShares Launches Chainlink, Uniswap ETPs in Germany

<div id="highlights-block_61c4a343bedc8" class="highlights">
 <ul>
 <li>The majority of retail investor interest is now going beyond bitcoin and ether, according to CoinShares Chief Revenue Officer Frank Spiteri</li>
 <li>The firm is looking into how it can share staking rewards with investors through new products</li>
 </ul>
 
</div>



While institutional investors continue considering products focused on the two largest crypto assets, CoinShares’ self-directed customers have become increasingly interested in alternative coins, firm executives said.



Though CoinShares is taking a measured approach to new products, the firm expects to bring exposures to more coins other than bitcoin and ether, including those that allow for staking.



“We’ve taken our time to ensure that we build and structure products that have longevity in this market,” CoinShares Chief Revenue Officer Frank Spiteri told Blockworks in an interview. “We’re not here to just get products out ASAP that won’t stand the test of time.”



Townsend Lansing, the London-based crypto investment firm’s head of product, noted that the firm has built its retail and institutional client base by first offering exposure to traditional coins.



CoinShares’ range of physical exchange-traded products (ETPs), which the firm launched in January, include offerings that invest in bitcoin (BTC), Ethereum (ETH), litecoin (LTC) and XRP &#8211; the native digital asset of the XRP Ledger, which aims to be a global payments system.



The four products have combined assets under management of about $600 million. CoinShares listed the bitcoin and ether funds <a href="https://cms.blockworks.co/coinshares-expands-reach-of-bitcoin-ether-etps/" target="_blank" rel="noreferrer noopener">in additional countries</a> in September.&nbsp;&nbsp;&nbsp;&nbsp;



The firm will focus on expanding its offerings through exposures to other assets in 2022, Lansing said, as well as provide education to investors.&nbsp;



“We’re not just going to launch alts and have them out there,” the head of product noted.



<blockquote class="wp-block-quote">“If staking’s possible, we’re going to look to how we can share those staking rewards with investors.”</blockquote>



CoinShares will also seek to build out its <a href="https://coinshares.com/etps/xbt-provider" target="_blank" rel="noreferrer noopener">XBT Provider lineup</a> with exposures to assets that can be lent out to earn additional yield. The firm currently offers bitcoin and ether tracker ETPs denominated in Swedish Krona and Euros.



In addition, the firm is considering ways to add to its <a href="https://coinshares.com/products-services/index-strategies" target="_blank" rel="noreferrer noopener">slate of index strategies</a>, the executives noted.



“A lot to come,” Lansing said. “We’re very much on the cusp of adding a bunch of new coins to the prospectus and launching a few new things, so it looks like it’s going to be a very innovative and exciting year for us.”



<h3>Who’s investing?</h3>



Most buyers of CoinShares’ products are self-directed retail investors, and that remains the biggest opportunity, Spiteri said.



Roughly 40% of the assets within the firm’s physical ETP range come from Switzerland. Assets in the XBT Provider funds are predominantly from retail investors in Sweden, the executive noted, though private banks also invest in those offerings.&nbsp;&nbsp;



“The fact that this product was the first exchange-traded product that gave access to bitcoin and Ethereum and it was the only option that many of these private banks had, you see a big adoption globally for that product from the private banks,” Spiteri explained.



In terms of retail investors, the majority of the interest is beyond bitcoin and ether, Spiteri noted.&nbsp;



Digital asset investment products suffered outflows of $142 million last week following 17 straight weeks of inflows, according to a CoinShares fund flows report published on Dec. 20. The outflows came at a time when there have been outflows across all risk assets following the <a href="https://cms.blockworks.co/fed-gets-hawkish-doubles-taper-signals-three-rate-hikes-in-2022/" target="_blank" rel="noreferrer noopener">Federal Reserve’s statement on tapering</a>.&nbsp;



A total of $89 million came out of bitcoin products, while Ethereum offerings had record outflows of $64 million. But alternative coins, such as Solana (SOL) and Polkadot (DOT), had inflows of $6.7 million and $2.5 million, respectively, the report states. Multi-asset investment products brought in $1.5 million.&nbsp;



<a href="https://cms.blockworks.co/wisdomtree-launches-spot-etps-in-europe/" target="_blank" rel="noreferrer noopener">WisdomTree</a> and <a href="https://cms.blockworks.co/21shares-crypto-etp-in-europe-excludes-btc-and-eth/" target="_blank" rel="noreferrer noopener">21Shares</a> each launched a crypto exchange-traded product in the last month that excludes bitcoin and ether.&nbsp;&nbsp;



Despite retail investors’ increased interest in altcoins, Spiteri said CoinShares’ conversations rarely stray from bitcoin and ether.



“We’re still some way from that institutional adoption en masse, and a lot of that is due to the internal situations where we see a huge amount of polarization within firms,” Spiteri said.&nbsp;



<blockquote class="wp-block-quote">“They’re still going through that process just to get bitcoin and potentially Ethereum as an asset class that they’re willing to invest in or can invest in.”</blockquote>



<h3>A new partnership</h3>



CoinShares partnered with Germany-based digital wealth manager and broker Scalable Capital earlier this month. The alliance allows Scalable Capital to offer its customers crypto ETPs alongside stocks and ETFs.&nbsp;



Scalable Capital wanted to offer crypto trading backed by physical ETPs and contacted various crypto ETP providers, according to Spiteri.



“Based on the range of products we have, the range of products we’re planning to have, our pricing level, our research and our brand, they decided to work with us,” he said.



Called Scalable Crypto, the new offering developed through the partnership is backed by CoinShares&#8217; physically backed ETPs.



&#8220;Cryptocurrencies have become an established asset class in a balanced portfolio,” Scalable Capital Co-founder Erik Podzuweit said in a statement. “CoinShares as our partner allows us to offer seamless access to crypto trading for our clients.”



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