Despite regulatory hurdles in launching Exchange Traded Funds (ETFs) in the US, elsewhere in Europe, the sector is about to experience the first Bitcoin Exchange Traded Note (ETN) futures contract which is another important Exchange Trade Product (ETP) for investors. These ETPs are considered important digital instruments whose primary users are institutions themselves.
Despite the availability of regular futures contracts on various crypto exchanges, official ETNs have faced delays in launching in the European Union (EU). The economic zone is notorious for its hurdles in allowing the crypto sector to succeed and has only allowed the derivative ETN after several other countries including Canada. Nonetheless, the launch of the first such financial instrument is likely to improve institutional investment in the sector, bringing it to new heights.
According to Randalf Roth, executive board member of the Eurex exchange:
Given the growing institutional demand for secure exposure to Bitcoin, we are delighted to begin listing these Bitcoin ETN futures on our regulated trading and clearing infrastructure at Eurex…., This move will allow a greater number of market participants to trade and hedge Bitcoin, with this new future being treated in the same way as any other derivatives contract in terms of central clearing, netting, and risk management.
The New Bitcoin Futures ETN is being launched by derivatives solution provider ETC Group. According to the organization’s press release, trading through this instrument will begin on September 13. It will be launched in Eurex, the continent’s largest futures market and thus target quite a large segment of investors in the process. The company already operates the first Bitcoin ETN in the continent BTCetc Physical Bitcoin (BTCE). Now with the new trading option, it is looking to open new avenues for investors to trade and make money.
Bitcoin itself has been acting quite bearish in the last few weeks, rising from multi-month lows of around $28.8k to as high as $50k just yesterday before dropping to around $48k at press time. The main institutional investing juggernaut operating in the sector includes Grayscale Bitcoin Trust (GBTC) that has over $15 billion worth of crypto in custody overall. The futures market itself within the industry is smaller than conventional trading but constantly attracts more and more investors to the sector, thus proving beneficial for it overall.
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