Bitcoin-based derivatives exchange-traded notes (ETN) will be available for European investors on September 13th, 2021. Leading derivatives exchange Eurex announced this investment product via its website.
We’re excited to announce the launch of #Bitcoin ETN #futures. As the extension of the ETN traded so successfully on @Xetra, the new contract offers clients access to the price of Bitcoin in a regulated on-exchange and centrally cleared environment. https://t.co/N5A0EVqAYp pic.twitter.com/qr6firZWNX
— Eurex (@EurexGroup) August 20, 2021
The derivates arm of financial titan Deutsche Börse Group will provide its client with Bitcoin exposure. This product will be the first BTC-based derivatives in Europe and will comply with the region’s “centrally cleared environment”.
The ETN will track the BTCetc Bitcoin Exchange Traded Crypto, listed on the Frankfurt Stock Exchange, according to the official post. This product has been amongst the most traded ETN and ETF on the platform since June 2020.
The futures contract will be traded with euro and will be physically backed and delivered in Bitcoin ETN, the exchange platform clarified. In that way, investors can benefit from BTC’s performance, avoid custody complications, and trade on a regulated exchange.
This set-up allows investors to track the price development of Bitcoins in a fully regulated on-exchange environment and based on a transparent price discovery of the underlying ETN. Both the underlying ETN, as well as the futures, trade, clear and settle on Deutsche Börse Group’s proven infrastructure.
The platform will provide clients with their clearing, netting, and risk management processes. In doing so, they can benefit from less counterparty risk, and optimize operational costs. A member of the Eurex Executive Board, Randolf Roth, said the following:
There is significant demand from instutional investors to gain Bitcoin exposure in a secure and regulated environment. We are pleased to be the first regulated exchange to offer this innovative contract. The new Bitcoin ETN futures enable investors to trade and hedge Bitcoin within Eurex’s proven trading and clearing infrastructure without the need to turn to unregulated crypto venues or set up a separate infrastructure, such as a crypto wallet.
Bitcoin Financial Investment Products Bloom
2021 has seen the biggest increase in Bitcoin-based investment products from ETN to Exchange Traded Funds (ETF). In America, Canada approved the first BTC and ETH-based ETFs, shortly after Brazil followed.
The launch of BTC ETN by Eurex suggests there is a growing demand for crypto exposure. The post claims that the Deutsche Börse has already expanded its “innovative offering” with other ETNs based on Ethereum, Bitcoin Cash, and Litecoin.
The United States continues to lag behind its neighbors and closest allies. Regulators in this country are yet to approve a similar product. On the contrary, the country seems to be taking measures that could impact the crypto industry and its sustainability in the U.S.
At the time of writing, BTC trades at $48,322 with a 5.9% profit in the daily chart and an 8.6% profit in the 7-day chart.