To understand the benefits and advantages of crypto ETPs, how they offers coinsharesit makes sense to first define ETPs and how they work. ETP stands for Exchange Traded Product. This is a financial product traded on regulated exchanges. It reflects the value of an underlying asset, such as a cryptocurrency.
Crypto ETPs are tradable on regulated exchanges
A key advantage of a crypto ETP is its tradability. These financial products can be traded on the stock exchange just like stocks and are therefore directly accessible to a wide range of investors. Compared to small crypto marketplaces and decentralized exchanges, trading on regulated exchanges offers investors the greatest convenience in managing their assets.
ETPs can be bought and sold at any time during trading hours, guaranteeing investors the ability to react immediately to market developments and secure their liquidity.
Another big plus of accessing cryptocurrencies through an exchange-traded crypto ETP is the regulations and high standards that issuers of ETPs like CoinShares must meet.
While investors have repeatedly been exposed to the risk of hacks, fraud and serious management errors when purchasing via crypto exchanges due to the lack of regulation and control bodies in the past, these serious weaknesses are excluded with crypto ETPs.
Crypto ETPs are fully secured and create trust
The security of assets is of paramount importance Crypto ETPs like CoinShares highest priority. This is perhaps one of the most important arguments for preferring them to investing on crypto exchanges. ETPs are 100 percent physically secured with a real asset.
This gives investors additional protection against default compared to investments in cryptocurrencies with synthetic hedges. This gives investors a good feeling in the long term and strengthens their trust in the underlying investment product.
Other key advantages of ETPs are their transparency and the possibility of diversification. This means that investors know exactly which asset they are investing in via an ETP and can trade cryptocurrencies in addition to stocks, bonds or commodities.
Coinshares’ ETPs not only track individual crypto assets, but also enable the trading of crypto indices (a selection of fixed crypto assets) as well as the staking of cryptocurrencies to generate passive income.
In addition, ETPs from CoinShares score with low asset management costs while still offering highly professional asset management.
This applies to crypto ETPs for tax purposes
As with all other financial products, it is important for investors to know and observe the tax rules for crypto ETPs. The regulations depend on the investor’s registered place of residence.
Investments in crypto ETPs are treated in Germany for tax purposes in the same way as direct investments in cryptocurrencies, as the Federal Ministry of Finance clarified in 2022. Investors therefore have no disadvantages when investing in a represented crypto asset via an ETP.
For people registered in Germany, capital gains tax is levied on the profits achieved, which is currently 25 percent. Any losses can be offset against capital gains from other investments in order to reduce the tax burden.
There is also the attractive option of making the crypto ETPs completely tax-free, provided the holding period is at least 1 year without interruption. However, this only applies if the ETP has a delivery option, as is the case with CoinShares.
As with all other investment products, it is generally advisable to seek individual tax advice in advance.
Why should investors trade crypto ETPs with CoinShares?
CoinShares is a pioneer in the field of crypto ETPs. The first Bitcoin ETP was released in 2015 and the first Ethereum ETP followed in 2017. CoinShares therefore already has around 10 years of market experience with this special asset class, which sets CoinShares apart from other providers.
CoinShares customers also benefit from the very attractive conditions. The fees for crypto ETPs are the lowest that investors can find on the market. They are only 0.35 percent for the BTC ETP, which is physically secured with Bitcoin. There are no fees for the crypto indices and the staked Ethereum ETP.
Conclusion: Buyers of crypto ETPs can sleep soundly
If investors decide for Crypto ETPs from CoinSharesthey will receive an extremely convenient financial product that promises many services on the one hand and few risks on the other.
Investors who have a medium to long-term focus can sleep soundly with an investment in crypto ETPs and do not have to worry about whether their investment will still be there and available the next day. There is never a need to reallocate capital to maintain liquidity.
For more information, visit CoinShares’ Brandhub
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