- Digital asset management platform CoinShares is launching a bitcoin exchange-traded product (ETP) which will have physical backing from the company
- The product is set to be enlisted on SIX exchange which is based in Switzerland
- Townsend Lansing, Head of Product for the crypto management company, shared that an ETP with physical backing reduces credit risk
CoinShares will be introducing a physically-backed bitcoin ETP which will be listed in the Switzerland-based crypto exchange called SIX.
CoinShares Physical Bitcoin (BITC) To Be Launched Soon
A new bitcoin exchange-traded product (ETP) will be launched by CoinShares, a cryptocurrency asset management platform. The product, which is being referred to as CoinShares Physical Bitcoin (BITC), will be enlisted on Switzerland’s primary crypto stock exchange SIX today. Each individual unit of the novel BITC will contain a physical backing of 0.001 bitcoin.
ETPs are exchanged and settled like offers. They are aloof ventures that intend to reflect the exhibition of a basic resource. As CoinShares’ BITC is set to have complete physical backing, it will directly hold the basic resource for secure commitments. The Swiss exchange will be charging a processing fee of 0.98% on all transactions pertaining to the ETP.
The AUM of CoinShares Bitcoin ETP Exceeds $100 Million
CoinShares’ BITC will enter the crypto market with their assets under management exceeding $100 million. This has fuelled institutional investors’ attraction towards the product. The digital wallets meant to hold bitcoin (BTC) are highly secure, and in the case of BITC, they will be regulated as well as maintained by Komainu. The latter will be the custodian of two different wallets, one will serve the purpose of handling subscription and redemption of digital assets, while the other virtual wallet will be utilised for long term assets. CoinShares, Nomura, and Ledger have partnered with each other to create Komainu, a joint venture between the three.
All the previous bitcoin ETPs held by CoinShares are artificially structured. This means that such products do not have a 100% physical backing of any kind, according to Townsend Lansing, the Head of Product for CoinShares. However, BITC will have a complete 100% physical backing, unlike other ETPs which hold 75% of physical bitcoin’s exposure, whereas the leftover 25% can be utilised to purchase futures of BTC or liquid money. Lansing added that the novel BITC will significantly reduce the credit risk because of the physical backing being provided to it.
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