What Is An Exchange Traded Product?
In simple words, ETPs are a financial product that you can publicly trade in the stock market. They provide a great way to make your portfolio diverse by exposing you to an asset class. We’ll take a detailed look at Coinshares Physical Bitcoin BITC Exchange Traded Product in this article. Since they trade on the exchanges, their prices vary on a day-to-day basis. But note that these prices are based on the investment that is tracked by them.
You can benchmark ETPs to multiple financial asset instruments, like bonds, currencies, commodities, and stocks. There can either be a few of them or even hundreds of investments lying underneath each ETP.
This ETP by Coinbase is physically backed. The underlying asset class of this ETP is Bitcoins. Investors can expose themselves to the price of Bitcoin on a regular stock exchange in Europe. These Bitcoins are custody of Komainu, one of the top digital asset custodians in the world right now.
CoinShares have been creating waves in the crypto world for a long time. They came up with the first-of-its-kind Bitcoin investment fund. They also created the first-ever Bitcoin securities on a conventional regulated exchange.
The ticker symbol of the Coinshares Physical Bitcoin ETP is BITC and it can be traded in four currencies. These are USD, GBP, Euros, and CHF.
What is the Difference Between Physically Bitcoin Settled and Cash Settled Exchange Traded Product?
When talking about Coinshares Physical Bitcoin ETPs, there are two broad classifications. In the Physically Settled Exchange Traded Product, the seller and the buyer mutually agree to observe the prices of USD and BTC at a specific time of the day. They then settle the losses and profits of their futures that will expire, based on these prices observed. In either of their accounts, credits and debits occur. None of them have any obligation to receive or deliver any USD or BTC.
On the other hand, cash-settled Coinshares Physical Bitcoin Exchange-Traded Product makes the buyer deliver the USD mentioned as a part of the contract. The seller, upon receiving the Dollars must provide the BTC value. So essentially, this becomes a spot trade.
What Makes BITC Unique?
According to the team at Coinshares, BITC is the next stage of crypto-currency evolution. It is one-step closer to bridge the gap between the cryptocurrency financial ecosystem and the conventional financial ecosystem.
Also, BITC makes it convenient and accessible for institutions and large-scale investors to explore this world of finance. Even the base fee of the BITC is just 0.98% which is less than half of the conventional base fee of close to 2% on the SIX Swiss Exchange.
The buying and selling of the BITC are almost the same as any ordinary fund or stock. If your investment platform or broker has this option, you can invest with them the same way as other investments. On the investment platform, search for BITC or Coinshares Physical Bitcoin.
Enter the value of securities you want to either buy or sell.
Place the order.
If it is a limit order, wait for the order to execute. If it was a market order, you will buy or sell at the current market price.
BITC Management Fee
The Coinshares Physical Bitcoin ETP charges a management fee of 0.98% aimed at maintaining this cryptocurrency asset class.
Key Service Providers of the BITC Fund
The underlying asset verification is done by Armanino LLP. As mentioned above, the custodian of Bitcoins is Komainu (Jersey) Limited. Here is the list of other service providers of this unique ETP fund:
Auditor – Baker Tilly Channel Islands Limited
Trustee – The Law Debenture Trust Corporation
Issuer – CoinShares Digital Securities Limited
Administrator – JTC Funds Solutions (Jersey) Limited
Registrar – Computershare Investor Services (Jersey) Ltd.
Overall, the CoinShare Physical Bitcoin BITC ETP is an incredible leap in the world of cryptocurrency because now, you can trade your Bitcoin exposure alongside your stocks and bonds on an exchange. It is a great way to get an initial feel of the crypto world. If you are looking to invest though, stay cautious and understand the risks involved.
I am a data analyst by profession who loves to crunch numbers at daytime and come home wondering how my passive income numbers for the day look like. I believe in being rich rather than looking rich. Follow me for Cryptocurrency, FIRE, Personal Finance, Credit Cards and Digital Nomad updates