In recent months, several investment firms, including Fidelity, UBS and State Street Global Advisors, confirmed that they, as well as their competitors BlackRock and Invesco, are evaluating the possibility of offering exposure to cryptocurrencies, such as bitcoin. Morningstar data shows the potential appeal of these products to asset managers, as assets in exchange traded products and mutual funds with cryptocurrency exposure have exceeded €10.5bn.
A bitcoin exchange-traded product (ETP) is Invesco’s first venture in the cryptocurrency space in Europe. With a total expense ratio (TER) of 0.99%, Invesco Physical Bitcoin ETP (BTIC) is listed on the Deutsche Boerse. In addition to being physically backed, BTIC tracks CoinShares Bitcoin Hourly Reference Rate index, which tracks the price performance of the currency minus fees. BTIC is targeted at institutional investors and offers a wrapped exposure to bitcoin, which accounts for 42 percent of the $2trn digital asset market.
As an ETP, Invesco Physical Bitcoin will be 100% backed by holdings in underlying digital assets. The objective is to provide the price performance of Bitcoin, less a fixed fee of 0.99% per annum. As the index sponsor and execution agent for the Physical Bitcoin ETP, CoinShares, Europe’s largest and longest-standing digital asset investment firm, will serve as the index sponsor.
Crypto investment products are being demanded more and more by traditional investors as Crypto adoption expands globally, it is no surprise that institutions are adopting crypto and developing investment products based on crypto. However, investors need to perform very thorough due diligence to understand how cryptocurrencies and related futures markets operate.
