“Who Said What?” This is a series of articles launched by Coin24 with the aim of interviewing French-speaking players in the cryptocurrency and blockchain world to educate you about concepts or bring you industry-related solutions or products that have yet to be invented.
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Who is Anne Barratt?
Marketing and Communications Manager at 21Shares, Ann Barratt has worked for many years in the financial industry in the markets (Euronext and NYSE) as well as in the banking sector. A graduate of Sciences Po Paris, Sup de Co Paris and HEC Paris, she regularly writes for economic and financial magazines such as L’Agefi or Allnews in Switzerland. Since 2019, she has partnered with 21Shares, where she is now responsible for communications strategy.
Could you remember what cryptocurrency ETPs are and what are their benefits for investors?
While there is a lot of talk about the SEC’s decision over Bitcoin or Ether ETF, European investors are less accustomed to hearing about ETPs or exchange-traded products.
This is why my first question to Anna was to remind you that 21Shares offers cryptocurrency ETPs.
ETPs (exchange traded products) are trackers, meaning they are 100% replicating the performance of the underlying asset – cryptocurrencies in the case of 21Shares products: Bitcoin, Ethereum and others like Ripple, just to name a few.
Like index trackers (ETFs) or commodities (ETPs), they are traded on stock exchanges. Therefore, they offer investors daily liquidity like a stock.
Thus, the latter can easily acquire them and at lower costs – the commissions for this type of investment (from the family of passive management) are lower than in actively managed funds.
For those looking to learn more about the difference between ETFs and ETPs, I advise you to consult our Who Said What with Laurent Kssis, which explains that the hardest problem is that the names of these financial products can vary depending on countries or jurisdictions in which they are established or offered for trade.
So far, 21Shares has hosted its cryptocurrency ETPs in Switzerland, Germany and Austria. Is the French accession following an increase in demand from French investors?
Anna explains to me that the Swiss company 21shares launched its first ETP in November 2018 on the Swiss SIX Exchange. This ETP, called HODL, tracked the performance of 5 cryptocurrencies – Bitcoin, Ethereum, Litecoin, Bitcoin Cash, and Ripple.
Since then, 13 other cryptocurrency ETPs have been launched by the company on the Frankfurt, Stuttgart and Vienna stock exchanges and are available to investors in three fiat currencies: dollars, euros and Swiss francs.
Since June, the Euronext marketplace has been offering 21Shares Bitcoin and Ethereum trackers, an important step for the Swiss company. It is also an important opportunity for European investors who want to take advantage of this asset class to invest in the cryptocurrency market without owning tokens.
France, like other European countries, has been slow to recognize the value of cryptocurrencies as an independent asset class. French, English, Dutch regulators – just to name a few – have finally recently approved a list of financial instruments offering investors access to cryptocurrencies, the ETP.
Why? Because they offer the best possible protection: ETPs are 100% “backed” (1 to 1 counterparty) and cleared as a share or any other asset class.
This launch marks an important milestone for both French investors, who have long been clamoring for liquid cryptocurrency products, and 21Shares, which has relentlessly followed its initial strategy of listing its ETP range on all European stock exchanges, the mainland and the United Kingdom.
The listing on the Paris and Amsterdam stock exchanges is the result of this strategy that goes beyond a simple tactical addition!
Thus, as of June 1, three products indexed in Bitcoin and Ethereum from 21Shares have listed on the Euronext Paris despite the recent downturn in the cryptocurrency market. What does this new move mean for European investors?
As Anna explains to me, this is an important step towards ensuring that European investors can finally benefit from cryptocurrency financial products that are as safe and confident as any financial instrument in their portfolio diversification strategy (regardless of the recent downward movement).
Investors are used to changes in the prices of the underlying asset, this is the essence of investing in the stock market. Professional investors benefit from market volatility, just as people who become more educated and dexterous in managing their assets benefit from both bullish and bearish moves.
Those who bought GAFAM shares before the health crisis could congratulate themselves on their investment, just like those who bought ETP with BTC or ETH could rub their hands …
Ann notes that earnings more than offset the recent downturn. She gives me an example of the very good performance of 21Shares ETP in Bitcoin (ABTC), which has grown nearly 93% YTD and over 320% since launch!
If you are not very optimistic about Bitcoin’s upside potential, you can also take advantage of the 21Shares product, which allows you to face Bitcoin’s inverse performance. Thus, it is a short sell position to take advantage of the fall in the price of the token. I then ask Anna if this product is as popular as Bitcoin ETP to take advantage of its growth.
Reverse BTC ETP (SBTC) is as popular as Bitcoin ETP (ABTC), mainly because the two products complement each other. The first, perfect for short-term use, allows you to capitalize on Bitcoin’s bearish effect – hence intraday volatility. The second is a real need for medium and long term investments. The wise investor will opt for double exposure.
Who said what? With Ann Barrat – the last word
Thus, ETPs for cryptocurrencies allow investors looking to buy underlying funds that are sometimes difficult to obtain. This is especially true for institutional investors who have to deal with regulatory requirements imposed by their compliance departments, or retail investors who do not want to deal with buying and holding tokens.
In this way, ETPs allow retail and institutional investors to profit from the cryptocurrency market in an easier, safer and less costly way, while maintaining market liquidity with listed securities. This is why 21Shares has developed many products and continues to do so in order to offer an ever wider range of cryptocurrency ETPs.
We intend to complete this first step forward with other ETPs in the 21Shares range, be it a single cryptocurrency, specifically Ripple, or a basket of cryptocurrencies. These baskets allow investors to access cryptocurrencies multiple times in the same way that a CAC 40 ETF offers access to 40 shares instead of just one.
Thanks to Anna Barratt for explaining to us the importance of ETP for cryptocurrencies!