CoinShares plans to launch a further seven crypto ETPs in addition to its Bitcoin offering
CoinShares has launched a physically-backed Bitcoin ETP, the first of a full suite of eight digital securities the firm hopes to bring to market.
The CoinShares Physical Bitcoin ETP (BITC) comes to market with assets under management in excess of $100m, allowing the product to be considered by institutional investors.
Each unit of BITC is backed by 0.001 Bitcoin at launch and the ETP is listed on Swiss exchange SIX, with a management fee of 0.98%.
The secured wallets required to hold Bitcoin will be maintained by custodian Komainu, a joint venture between CoinShares, Ledger and Nomura, which has established two separate wallets: a subscription and redemption wallet and a long-term wallet.
The subscription and redemption wallet will hold sufficient Bitcoin equivalent to a maximum of $50m to “ensure liquidity for creations and redemptions”, CoinShares said, while the long-term wallet will hold all Bitcoin in excess of this amount, a model which would be applied across the full range of digital securities.
BITC’s price per security will be calculated daily by multiplying the coin entitlement (0.001 BTC at launch) by the price of Bitcoin.
CoinShares Physical Bitcoin marks the first physically-backed cryptocurrency launch for the Jersey-based issuer, which intends to launch a further seven digital securities, according to its base prospectus, although these plans are subject to change.
A full suite of ETPs is planned for Ethereum, XRP, Litecoin, Tezos, EOS, Binance Coin and Polkadot, alongside Bitcoin, which have the following respective debut coin entitlements: 0.03 ETH, 40 XRP, 0.2 LTC, 5 XTZ, 4 EOS, 0.4 BNB, 1 DOT.
CoinShares highlighted the risk of BITC in its key investor information document, recommending that investors “monitor the value of the product constantly as sudden changes in value will be frequent and abrupt”.
Townsend Lansing, head of product at CoinShares, said: “Since 2014, CoinShares has provided an effective bridge between the cryptocurrency ecosystem and traditional finance via our XBT Provider family of ETPs. BITC and its platform represent the next stage of this evolution.
“As the European market leader for these products, we will continue to develop investment vehicles that eliminate the boundaries prohibiting institutions from actively investing in what we believe to be the future of finance.”
Frank Spiteri, chief revenue officer at CoinShares, added: “Over the last 12 months, we have seen a steady increase in interest and demand for digital assets from our institutional clients, and this platform has been built with their feedback in mind.
“The physically-backed structure is familiar to institutions who have extensive experience in trading similar commodity-based investment vehicles. We ae looking forward to servicing both new and existing investors with our new CoinShares Physical product line.”