ETC Group: crypto products on the exchange

the ETC Group was the first company to bring an exchange-traded Bitcoin product to the German stock exchange XETRA, the largest ETF trading venue in Europe, in June 2020. Since then, the company has steadily expanded its range of ETCs and, as a Germany-based issuer, is the leading provider of crypto securities with over USD 2.2 billion in assets under management (AUM) at peak times.

When developing the products, which above all represent a solution for institutional investors, we concentrated on maximum quality and investor protection.

Maximilian Monteleone, co-founder and CMO of ETC Group

In this way, ETC Group is helping to make the cryptocurrency asset class accessible to a broader range of private and institutional investors. They can now invest through the same traditional financial markets that they use for their stock, ETF and fund portfolios. This brings with it a number of advantages.

Because while the security and regulatory standards of crypto exchanges are immature, traditional exchanges offer transparent fees while ensuring the safe management of digital assets. So users don’t have to worry about hacks, scammers or the operation of a wallet and can invest in their preferred cryptocurrencies or baskets or indices.

But what exactly is the difference between ETCs, ETFs and ETPs?

ETCs and ETFs belong to the same family of financial products: Exchange Traded Products (ETPs). Structurally, crypto ETCs are similar to exchange traded commodities. However, instead of being backed by a specific amount of the commodity, each crypto ETC is backed by cryptocurrencies.

Both products are subject to the same default risk of the publisher. This means that assets are not at risk in the event of issuer bankruptcy thanks to an independent trustee. In addition, both products are perpetual in their term and are traded on the exchange in the same way. In this way, the products offer a 1:1 exposure to an underlying asset or index while at the same time providing safe custody and investor protection.

So, the main common characteristics of ETFs and ETCs are:

• They’re stocks.
• They are listed on regulated exchanges.
• They can be traded like stocks or shares through a regulated bank or trading account.
• They allow investors to participate in investment opportunities with little effort by passively tracking the price or underlying of an index, commodity or company stock.

ETFs and ETCs can be listed anywhere from the German to the New York Stock Exchange and, in the case of certain gold ETCs or the crypto ETCs of the ETC Group, are tax-free for German investors after a one-year holding period. Bitcoin ETCs would be referred to as ETFs in other markets (such as Canada). The difference, however, is that European financial regulation provides a framework based on minimum diversification criteria. This prohibits European exchange-traded funds from investing in benchmarks of individual assets or in individual physical underlyings.

The ETC Group offers other innovative products, such as a savings plan and so-called theme ETFs

Exchange-traded index funds, called ETFs, allow investors to get broad exposure to a market sector without buying a large number of different stocks or shares. For example, ETC Group offers metaverse or blockchain ETFs. Through these, you invest in the most promising companies in the emerging market sectors without worrying about your portfolio management or custody. An example of an index is the S&P 500, which includes the stocks of the 500 largest publicly traded US companies.

Another innovative product from the ETC Group is the cryptosavings plan. With this you don’t have to worry about the perfect time to shop, because the same amounts are invested regularly. In this context, the ETC Group entered into a partnership with Comdirect, a brand and online broker of Commerzbank AG. This expanded her since the beginning of the year savings plan-Cryptocurrency offering with ETC Group products.

Be it single asset ETCs or index ETFs, ETC Group makes it easy to access crypto and digital assets on regulated exchanges. You can simply search for the ISIN or WKN at your bank or securities broker and use it to buy crypto ETCs on Bitcoin, Ethereum and Co. on the stock exchange and add them to your existing portfolio. Like any other securities, the shares are kept securely in our own custody account.

Get started today? Visit the official homepage of the ETC Group for more information.