Exchange-traded fund (ETF) pioneer WisdomTree Europe has announced that it will be launching a physically-backed Bitcoin exchange-traded product (ETP) as appetite grows for digital assets.
The fund, which will allow investors to speculate on Bitcoin without having to go through the onerous process of buying the underlying digital asset themselves, has been launched to provide easier access for institutional investors.
According to a press release published earlier today, the fund entitles each investor to a certain amount of Bitcoin, with a “share entitlement” relative to their investment in the fund.
This is similar to gold ETPs where funds are held in secure custody rather than held by individual investors.
WisdomTree has announced that it will be working with a Bitcoin custody provider to secure the digital asset collateral, although the group hasn’t disclosed who this will be.
WisdomTree’s fund will be traded on the regulated Swiss stock exchange, with shares in the fund being settled via a traditional settlement system.
Bullish sentiment amid bearish lows
The news comes at a time when Bitcoin has experienced a dramatic slump, moving towards new yearly lows.
Despite this, Alexis Marinof, WisdomTree’s Europe head, is still apparently bullish on digital assets, commenting:
“We have seen enough to believe that digital assets, like Bitcoin, are not a passing trend and can play a role in portfolios.”
Marinof also commented that institutional investors would be able to access the cryptocurrency markets more easily through a physical ETF.
Adding to this bullish sentiment are comments from WisdomTree’s CEO, Jonathan Steinberg, who shared:
“WisdomTree has always been at the forefront of innovation, and we see blockchain technology and digital currencies as being transformative for the asset management industry. Blockchain and cryptocurrencies have the potential to change how investors participate in financial markets, globally.”
Earlier this year, the London Stock Exchange (LSE) listed a cryptocurrency ETF from Invesco and Elwood Asset Management, which indexed 48 cryptocurrencies and tracked their performance through one fund.
However, physically-backed Bitcoin ETFs are still struggling to gain regulatory recognition in the USA, where the SEC has rejected the Bitwise and Winklevoss ETF proposals several times.