【Observation】Deutsche Boerse Listed Bitcoin ETP? Maybe Not That Important

The London-based ETC Group will list an exchange-traded product (ETP) named BTCE on the Xetra electronic trading platform of the Deutsche Boerse this month, backed 100% by Bitcoin. The CEO of ETC Group stated that this new product will help bridge the gap between institutional investors and Bitcoin, introducing Bitcoin to regulated mainstream markets. However, it may not have as much impact as anticipated.

News: Bitcoin ETP Listed on Deutsche Boerse

London-based ETC Group announced on June 9 that it will launch a centrally cleared Bitcoin Exchange Traded Product (ETP) on Xetra, the electronic trading platform of Deutsche Boerse Group, by the end of June. The product, named Bitcoin Exchange Traded Crypto BTCE, will be issued and distributed through the dealer HANetf. It obtained regulatory approval from BaFin on March 2 this year. The ETP will be 100% backed by Bitcoin, with the Bitcoin serving as collateral stored in cold storage by BitGo, the largest digital asset custodian in the current market.

According to the press release, owning one unit of BTCE is equivalent to holding a claim of 0.001 Bitcoin (BTC). Investors can exercise this claim with the issuer, redeeming the physical Bitcoin equivalent to the BTCE they hold, which is a significant feature distinguishing this product from others. ETC Group CEO Bradley Duke pointed out that compared to traditional Bitcoin (BTC) investments, BTCE offers more reassurance to traditional investors and significantly lowers the entry barrier.

Not That Significant? Understanding Xetra

Upon investigating the company ETC Group, a London-based company founded in 2019 with fewer than 10 employees, listing on Deutsche Boerse Group might seem glamorous, but it may not be as challenging.

The Xetra electronic trading platform operated by Deutsche Boerse Group was launched in 1997, enabling trading of stocks, funds, bonds, and is widely used among European exchanges. The requirements for listing on Xetra are not particularly stringent. According to an explanation by a European law firm, as it is not a government-regulated market but a market defined by the Frankfurt Stock Exchange, the capital and operational requirements for companies are simpler than listing directly on the Frankfurt Stock Exchange itself.

However, the phrase "listed on Deutsche Boerse Group" sounds impressive in writing due to its association with one of the world's largest trading centers, the Frankfurt Stock Exchange, but in reality, it amounts to being listed on Xetra for a fee.

Success Story of Institutional Bitcoin Products: Grayscale

The introduction of every Bitcoin financial product is a positive development for Bitcoin. Previously, there have been multiple reports on the significant growth of the Grayscale Bitcoin Trust (GBTC) fund, which operates on a completely different scale and is a successful private fund company.

Such products allow institutional investors, such as insurance companies, family offices, credit institutions, or funds restricted to regulated financial products, to enter the Bitcoin market, strengthening global consensus on Bitcoin. On the other hand, the more financial products backed by physical Bitcoin, the larger the scale, indicating a decrease in the circulation of Bitcoin in the spot market. This not only reduces market price manipulation but also helps drive up the overall price of Bitcoin.