Crypto investment firm ETC Group is launching an Ethereum exchange-traded product (ETP) on Deutsche Borse’s Xetra tomorrow, with ZETH as its ticker. This will be its second crypto investment product, following on from its Bitcoin ETP, according to a press release.
An exchange-traded product is a security that can be traded, where its value depends on an underlying security. In this case the Ethereum ETP will be tracked to the price of Ethereum, allowing investors to gain exposure to the volatile cryptocurrency’s price, without needing to buy it themselves.
The firm launched its Bitcoin ETP in June 2020. Since then, its assets under management have increased to $1 billion. According to the release, ETC Group’s Bitcoin ETP was the most traded product out of the exchange-traded notes listed on Xetra in the second half of 2020.
Xetra is a trading venue in Frankfurt, Germany, which is operated by the Frankfurt stock exchange. According to Xetra, more than 90% of trading in German shares goes through the marketplace, along with 30% of trading in exchange-traded funds (ETFs), which are similar to ETPs.
Institutional investors and Ethereum
Ethereum is the second-largest cryptocurrency by market cap. Where Bitcoin focuses entirely on transactions, Ethereum is designed as a smart contract platform, enabling tokens and decentralized apps (dapps) to be built atop it.
Institutional investment in Ethereum is still lower than with Bitcoin, as shown by the proportional investment in digital asset manager Grayscale’s various cryptocurrency trusts, but it is rising. Grayscale’s Ethereum holdings—on behalf of its largely institutional investors—have risen from 2.9 million ETH ($4.8 billion) at the beginning of February to 3.1 million ETH ($5.2 billion) today.