After completing its Bitcoin ETF, the firm is now set for the launch of an Ethereum-based ETP. CoinShare recently announced that it is set to commence operations of Ethereum-based exchange-traded product. This is contained in a statement made available by the company. Earlier last month, the firm had launched a Bitcoin ETP. The Ethereum-backed is the second ETP to be launched.
ETHE is the name given to the ETP, which has commenced with $75 million funds. An ETP refers to a security that is commonly valued and are regularly traded on stock markets in the daytime. In mainstream finance, exchanges use ETPs to track various assets’ prices, including stocks and Forex. As for the Ethereum ETP, Ethereum is the only asset that is tracked.
Ethereum-based ETP Wil Ensure Transparency
The exchange supports every new investor with 0.03 ETHE to expose them to Ethereum before starting to trade with the real asset. A statement released by the company explained that the introduction of ETHE had set a new standard of transparency and accountability for the crypto ecosystem.
Moreover, the newly launched product will offer institutions opportunities presented by Ethereum, the second-largest cryptocurrency by market capitalization. The exchange will list the Ethereum-backed ETP which will attract just 1.25% transaction fee, lower than the average industry fee of 2%.
Recall that in January, CoinShare introduced the Bitcoin-backed ETP on the same exchange. Komainu, a custodian firm, is in charge of both the Bitcoin and Ethereum-based ETPs. On Wednesday, CoinShares said it would launch an IPO in Sweden to achieve its goal of being the top crypto asset manager to do so. Bitcoin ETP refers to a security that monitors crypto value.
The similarity between them and stocks lies in the fact that they are both traded on the mainstream stock exchange, which is traded only during the day. This is in contrast to crypto exchanges that can be traded 24/7. Earlier, CoinShares held some ETPs. The firm is optimistic that the $200 million will rise following the surge in Bitcoin’s price. As of the time of writing this report, Bitcoin price is hovering around $50,000.
More About ETFs
Note that ETPs’ prices change every time of the day. Ethereum is the underlying asset that dictates the share price of an ethereum-based ETP, while Bitcoin also dictates the share price of a Bitcoin-backed ETP. ETPs are relatively less costly when compared to mutual funds. While investors stand to make profits when the ETP rises in their favor, they are also at the risk of loss if the ETP loses value.
Although ETPs have existed for three decades, investors have now been more attracted to the asset since the 2008 global financial meltdown. The incident led to a surge in ETP investment by $6.34 in 2020. This shows why ETP contributes a significant percentage of investment in the financial sector.
ETF, which has similar features to mutual funds but remains the most common ETP. ETF tracks track stocks, commodities, currencies, and more. A CoinShare’s official recalled that the ongoing bullish movement in the price of cryptocurremcies had not slowed down yet. Moreover, more and more new individual and institutional investors have been joining the industry.