Invesco Deploys Bitcoin ETP Physically Backed By BTC Peers

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© Reuters. Invesco Deploys Physically Supported Bitcoin ETP

US investment management firm Invesco recently unveiled a new physical media backed exchange traded product (ETP).

The Invesco physical Bitcoin ETP will operate with a fixed annual fee of 0.99% while the BTC will be held by Zodia Custody, a UK-based custodian registered with the UK’s Financial Conduct Authority (FCA).

One of Europe’s largest digital asset companies, CoinShares, will sponsor the ETP and also take on the role of executing agent.

The ETP, which is one of the UK’s first BTC ETPs, comes up quite surprisingly, as officials in the country are quite skeptical about the crypto market.

Invesco also launched this product simultaneously in the form of an exchange-traded note (ETN) on the digital exchange Xetra managed by the German exchange operator Deutsche Boerse (DE :). ETNs are a variation of ETPs.

The product is traded under the symbol BTIC while tracking the CoinShares Bitcoin Hourly Reference Rate. It has also been registered with the German financial authorities.

Invesco’s head of ETFs and indexed strategies, Gary Buxton, spoke about the appeal of physical Bitcoin support, explaining that:

Physical bitcoin is a more observable market. One of our concerns was the depth of synthetic liquidity as well as what it can have on valuations over time and this is something we weren’t entirely comfortable with. The company is also working with Galaxy Digital to pilot a Bitcoin ETF in the United States in what could be its biggest move yet. Meanwhile, India’s securities regulator has also approved an Invesco crypto ETF against all odds amid regulatory uncertainty in the country.

It is now evident that regulators have become more willing this year to approve crypto products if they comply with certain requirements. Investor protection has been a top priority and this is why the United States Securities and Exchange Commission (SEC) has been reluctant to approve a direct bitcoin ETF.

A few bitcoin futures ETFs have been approved in the United States, with ProShares doing exceptionally well, trading 24 million shares in its early days. SEC Chairman Gary Gensler seems to have a soft spot for BTC futures ETFs, but not spot ETFs.

Approval of crypto products globally is on the rise, with Europe in particular seeing new additions. The market is likely to see many more spot ETFs as crypto companies adjust to guidelines set out by regulators. This will help positively influence incoming flows.

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