The new ETP will allow investors to access Bitcoin without the need to hold the cryptocurrency directly
WisdomTree has entered the cryptocurrency space with the launch of a physically-backed Bitcoin exchange-traded product (ETP).
The WisdomTree Bitcoin ETP will seek to provide investors with a “simple, secure and cost-efficient” way to gain exposure to Bitcoin through traditional financial infrastructure.
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It will allow investors to access Bitcoin without the need to hold the cryptocurrency directly, store private access keys or interact with the blockchain or digital currency infrastructure “in any way”, according to the firm.
“I think it is pretty risky not to have crypto in your portfolio,” said Alexis Marinof, head of Europe for WisdomTree, “given the disruption it could cause to the traditional financial industry,
“We have seen enough to believe that digital assets, like Bitcoin, are not a passing trend”.
The ETP will be listed on SIX, the Swiss Stock Exchange, with a total expense ratio of 0.95%. The choice of SIX was shaped by Swiss regulatory environment being “by far the most supportive of crypto and deployment” according to Jason Guthrie, director of capital markets, Europe at WisdomTree.
He added: “At the moment we do not have a plan to list it in London, but we would love to bring it to the London Stock Exchange.”
Investors in the WisdomTree Bitcoin ETP will have an entitlement to an amount of Bitcoin and will be able to view each share’s coin entitlement, as well as the total amount of Bitcoin secured in custody.
Swissquote have been chosen as the custody partner for the ETP in Switzerland and will store the underlying Bitcoin assets offline on its secure cold storage technology.
The ETP, which is listed in USD, will be backed one-to-one by reserves and fully collateralised by Bitcoin.
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The firm will also employ “institutional-grade digital currency custodians” to ensure the safekeeping of the cryptocurrency.
It will only target professional investors initially, but WisdomTree hope to see regulatory approval for the wider investor community “in the near future”.
“We are not expecting this to be 15-20% of somebody’s portfolio, but something in the region of 1-5% depending on how bullish they are,” said Guthrie.
Jonathan Steinberg, CEO of WisdomTree, added: “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.”