ETC Group, a European issuer of crypto exchange-traded products, is extending the listing its entire portfolio to the Vienna Stock Exchange as the US awaits regulatory approval of a crypto ETF.
ETC’s listings of Bitcoin, Ethereum and Litecoin ETPs in Austria follow listings in London, Paris, Amsterdam, Zurich and Frankfurt. The issuer said its flagship Bitcoin ETP was the first crypto ETP approved by the German regulator and the first centrally cleared crypto ETP when it listed on Deutsche Börse ’s XETRA exchange in June last year.
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The funds are distributed by HANetf and Lang & Schwarz will be the market maker on the Vienna Stock Exchange.
Bradley Duke, chief executive of ETC Group, told Markets Media: “We have plans to issue some more single cryptocurrency ETPs and expect to launch quite a few more products before the end of this year.”
The group’s crypto ETPs allow institutions and retail investors to add exposure by trading on regulated markets through their conventional broker or bank in the same way as for conventional shares.
ETC’s crypto funds have been listed across Europe but the US Securities and Exchange Commission has not approved a Bitcoin exchange-traded fund.
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Gary Gensler, chair of the SEC, said in a speech this month that some mutual funds invest in Bitcoin futures traded on CME and he anticipates there will be filings for ETFs under the Investment Company Act (’40 Act).
Gary Gensler, SEC
“When combined with the other federal securities laws, the ’40 Act provides significant investor protections,” Gensler added. “Given these important protections, I look forward to the staff’s review of such filings, particularly if those are limited to these CME-traded Bitcoin futures.”
Galaxy Digital Holdings, the crypto-focused financial services firm run by ex-hedge fund manager Mike Novogratz, has recently filed with the SEC for approval to launch Bitcoin futures ETF.
Duke said: “There is mounting pressure for the SEC to approve a crypto ETF and I think its inevitable. Investors have protections when they are trading on regulated markets that are not necessarily there when they are trading the underlying cryptocurrency.”
He welcomed increased scrutiny from regulators and said it would help the industry by enforcing best practice and holding people accountable to increased levels of professionalism.
“There are states like New York, South Dakota and a few others coming forward and providing a regulatory framework for crypto,” Duke added. “New York state is coalescing as one of the centres of cryptocurrency because of its regulation.”
Carbon neutrality
In July ETC Group said BTCE will be the first Bitcoin ETP to offset its carbon footprint.
The issuer will offset the carbon footprint its flagship Bitcoin ETP with carbon credits, compensating for the carbon emissions associated with mining and transaction activities.
ETC Group said it will fund nature-based, carbon sequestration and renewable energy projects to offset all of its bitcoin-related Scope 3 emissions since the launch of BTCE, and will continue to do so on a quarterly basis. The group also announced it will join the Crypto Climate Accord, an organisation that seeks to move the entire crypto sector towards low carbon mining and operations, and net zero by 2040.
Bradley Duke, ETC Group
Duke said he would like to see other companies benefiting from cryptocurrencies take responsibility for their carbon footprint so ETC Group has published its methodology for calculating carbon footprints online.
“Where possible, all our products should be carbon neutral going forward,” he added. “We are already in the process of offsetting and studying the carbon footprint of our other ETPs and for us as an entity.”
Research
In August ETC Group released its second quarter 2021 market reports for Bitcoin, Ethereum and Litecoin. The study said that in April Bitcoin generated annualized revenue run rate of $2.9bn and that fees generated from Ethereum transactions have increased more than 5000% year on year.
The annualized revenue run rates are calculated from the total transaction fees, also known as network revenue, paid to crypto miners.
“We issue products but we also have an interest in the sector, technology and in educating investors,” Duke added. “The sector is young as cryptocurrencies have only been around since 2009 and there is a lot of complexity so we can help inform investment decisions.”
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Decentralized exchange volume also increased over 8,300% year on year in the second quarter to $3.4bn.
Duke said: “In the past few months we’ve seen leading cryptocurrencies generate more income through transaction fees than some of the world’s most valuable companies have done in recent years. We’re seeing increasing adoption of crypto assets, on institutional balance sheets in place of cash treasuries, and now even in government pension funds.”
