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ETPs can improve your portfolio’s return

The total assets under management across all crypto exchange-traded products (ETPs) worldwide have risen in the past month to more than $50 billion. As Bitcoin’s price is headed towards new heights, crypto ETPs have been topping the list with an increase in assets under management. Their performance has been stable and solid by market price over the last 30 days.

Most recently, institutional investors have been dominating the crypto space with hedge funds coming on top as the biggest contributors. Exchange-traded products linked to cryptos have seen their share prices grow in recent months, driven by Bitcoin’s price hike as well as investor interest.

To date, there have been several attempts to integrate cryptocurrencies into traditional investment vehicles with varying levels of success. For the most part, investors have had to enter a new, crypto-native environment in order to gain exposure to a given cryptocurrency. This could involve sending funds to unregulated entities to facilitate the purchase, which is a risk many managers are understandably unwilling to take.

The specifics of managing a portfolio in such a new and highly volatile market require a deep understanding of blockchain technology and the mechanisms that drive cryptocurrency growth. Navigating market volatility, regulatory hurdles, security requirements for storing crypto, and transferring client funds are all part of handling these types of investment products to minimize risks.

As such, FiCAS is introducing a Crypto ETP leveraging on the benefits of cryptocurrency adoption and the introduction of regulated investment products that are listed on Stock exchanges. Our 15 FiCAS Active Crypto ETP offers a broad range of securities-based products that are priced according to underlying digital assets. Similarly to stock, the ETP is attached to a commodity. For this particular product, the commodity is cryptocurrency.

"For investors looking to enter the crypto sector, capitalizing
on the first-movers advantage is paramount when seeking
open entry to access new asset classes."

“For investors looking to enter the crypto sector, capitalizing on the first-movers advantage is paramount when seeking open entry to access new asset classes.”

An investment in crypto requires for many either costly secure storage or an increased risk of loss or theft. New equity-like instruments that trade on regulated exchanges are therefore a key driver in democratising access to cryptocurrencies across the world. The ETP structure has since become ubiquitous within the commodity investment space and is now the go-to for tens of billions of dollars globally.

Transparency is a core component of FiCAS’ crypto-based ETP structure. The cryptocurrency ETP succeeds in offering a core measure of confidence for investors by enabling access to an audited website from the issuer, showing exactly how many coins are represented by the outstanding fund shares. This is already standard practice in physical gold ETP structures and provides an incomparable measure of transparency for investors.

We see this as one step towards cryptocurrency standardization, which will further drive demand for allocation of crypto belongings in standard portfolio allocation utilizing crypto ETPs. As the adoption rate of cryptocurrencies by both individual and institutional investors is accelerating, the marketplace will continue to mature. And crypto ETPs will play a pivotal role in these developments.

For more information about the world’s first actively managed Crypto ETP, please visit our product page to learn more about our ETP products.

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