WisdomTree has become the first established ETF provider to enter the cryptocurrency space with the launch of a bitcoin exchange-traded product (ETP).
The WisdomTree Bitcoin ETP (BTCW) is listed on the SIX Swiss Exchange with a total expense ratio (TER) of 0.95%, the cheapest crypto ETP on the market.
The firm said the reason for listing in Switzerland is the regulatory requirements for cryptocurrencies are more favourable than other exchanges in Europe.
WisdomTree is targeting professional investors with this product, however, added this will change if further regulatory barriers are hurdled.
BTCW will enable investors to access bitcoin without the need to hold the cryptocurrency directly, store private access keys or interact with the blockchain infrastructure.
The ETP is physically-backed meaning WisdomTree has purchased bitcoins and created smaller sized shares which can be traded on exchange.
The bitcoins are held by digital asset custodians who maintain cold storage facilities and specialise in physical and digital security procedures.
Alexis Marinof (pictured), head of Europe at WisdomTree, said the firm has been monitoring the cryptocurrency space for a while.
He commented: “We have seen enough to believe that digital assets, like bitcoin, are not a passing trend and can play a role in portfolios.
“We see many parallels between the cryptocurrency space and commodities.”
Rafi Aviav, head of product development, capital markets and technology at WisdomTree, said: “We have developed a solution which addresses the difficulties investors face in accessing digital assets and are bridging the gap between the underlying decentralised online blockchain technology and traditional investment structures.”
“Bitcoin is here to stay,” Jason Guthrie, head of capital markets, Europe, at WisdomTree, added. “The cryptocurrency space has the potential to be very disruptive.
“There is a lack of connectivity between the traditional investment universe and cryptocurrencies. We want to bring these two worlds closer together.”
Why bitcoin ETFs deserve a green light
Guthrie revealed the firm is planning to roll out a number of products in the cryptocurrency space in the future. “If it was just bitcoin, we would not be here,” he added.
It is clear WisdomTree sees cryptocurrencies as an area where they can differentiate from their rivals. There are only two other crypto ETP providers in Europe, XBT Provider and Amun, which listed the first crypto ETP in Switzerland last year, the Amun Crypto Basket ETP (HODL).