ETC Group launches first ETP on centrally cleared cryptocurrency Litecoin

ETC Group, a specialized provider of innovative, digital asset-backed products, will list on the German stock exchange‘s Xetra platform LTCetc – ETC Group Physical Litecoin ETC (Exchange Traded Cryptocurrency): an asset-backed debt security and issued in Germany, distributed and marketed across Europe by HANetf.

ETC Group’s new ETP will replicate the price of the Litecoin cryptocurrency, offering investors an institutional-grade product to take exposure to it. ELTC will be the first product on Litecoin to be listed on Xetra and will be centrally cleared. This is ETC Group’s third ETP on cryptocurrencies, following the listing: last March of ETC Group Physical Ethereum ETC, which replicates the price of Ether and was the first ETP on Ethereum to be listed on Deutsche Boerse; in June 2020 of BTCetc Bitcoin Exchange Traded Crypto (BTCE), the first centrally cleared ETP (Exchange Traded Product) on bitcoins.

Approved by BaFin (the German stock exchange regulator, which confirmed in March 2020 that it officially considers cryptocurrencies to be financial instruments), each unit of ELTC is physically backed by Litecoin stored in a secure and regulated institutional-grade repository. This entitles the holder of the instrument to a certain amount of Litecoin, in a structure very similar to ETCs backed by physical gold, and gives the investor the option to physically redeem in the cryptocurrency. 

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The ETC structure is based on a transparent and verifiable process to ensure that the provenance of the Litecoin in custody has been strictly controlled

 Investors do not have to engage in the technical challenges of buying and storing cryptocurrency, such as setting up a cryptocurrency wallet or transacting on unregulated crypto markets. You also don’t have to manage cryptographic keys or delve into blockchain technology. ELTC’s units are safely stored with a broker or bank, eliminating the risk of losing your investment due to, for example, a lack of knowledge of how cryptographic keys work.

ELTC will be backed by a network of authorized participants (PAs) and market makers experienced in both cryptocurrency and ETP markets. The PAs will ensure liquidity and tight spreads in the market, giving traders the ability to buy any denomination without having to worry about market effects. Exchanges will be centralized on Xetra, to which liquidity from many different crypto markets will flow. Investors can buy ELTC (Litecoin), ZETH (Ethereum) and BTCE (Bitcoin) through their brokers or their own bank with access to Xetra or Sis, and private or institutional investors who want to directly trade the Litecoin, Ether or Bitcoin they hold for the financial instrument can do so through the issuer’s authorized participants.

HANetf is a young and fast-growing company founded by two veterans of the ETF industry

Bradley Duke, ceo of ETC Group, said, “Litecoin has risen approximately 342% in the past year and, at $14.6 billion, is the ninth largest cryptocurrency by market capitalization generating growing interest from institutional and private investors. It is often talked about as the runner-up to Bitcoin, which is considered the undisputed leader. The current economic uncertainty has heightened investor interest in cryptocurrencies given the possibility of diversification from traditional assets such as stocks and bonds that they offer and the inherent qualities of hedging against inflation. However, cryptocurrency is a crowded market with more than 8,700 different digital currencies, making it difficult for investors to choose assets, store them and manage them. Our Bitcoin physically backed product, BTCE, was designed to allow investors to take exposure to Bitcoin in a more secure and transparent way and we are now able to offer the same benefits for Litecoin with the listing of ETC Group Physical Litecoin ETC which joins ETC Group Physical Ethereum ETC launched in March.”

Hector McNeil, co-founder and co-CEO of HANetf, added: “This is the third product on cryptocurrencies. ETC Group thus firmly maintains its leadership position in offering investment products on crypto assets. The tremendous success of their first instrument, BTCE, which has reached over one billion assets under management in just seven months since launch, demonstrates the growing demand for products that allow investors to avoid concerns about the technical challenges of buying and storing cryptocurrencies. ETPs are listed on regulated exchanges and investors can purchase them through brokers, who are also regulated. In all likelihood, this is the most convenient way to trade and invest in cryptocurrencies.”

HANetf is a young and fast-growing company founded by two veterans of the ETF industry – Hector McNeil and Nik Bienkowski. The company recently surpassed the $2 billion mark in assets under management, growing more than 85% since the beginning of 2021.

Backed by several London-based financial institutions, ETC Group consists of financial services professionals with experience in both the digital asset world and regulated markets. It aims to be a bridge between cryptocurrency markets and regulated markets to make investing in these currencies simpler, safer and more transparent. Its partners include: XTX Ventures, the venture capital arm of electronic market-making company XTX Markets, and financial services company ITI Capital.

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(Featured image by EivindPedersen via Pixabay)

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