With Xetra, Deutsche Börse has an important digital trading platform. This is exactly where Bitcoin is to be listed in June via a new type of ETC as a financial product. BaFin has given the green light.
There is some movement in Germany on the issue of being able to invest in Bitcoin (BTC) in a regulated environment. In June, an investment instrument called BTCE (Bitcoin Exchange Traded Crypto) is to be launched on Xetra, Deutsche Börse’s digital trading platform. This is announced by the ETC Group in cooperation with HANetf in a press release. This is a worldwide premiere, as the German Federal Financial Supervisory Authority (BaFiN) only recognized cryptocurrencies as financial instruments this March. The BTCE is now taking advantage of this and has received the approval of the BaFin.
Background to Bitcoin on the Xetra trading platform via BTCE
BTCE is intended to reflect the price development of Bitcoin and will be backed by physically held BTCs at 100 percent. The depository is BitGo, a U.S. company that specializes in such tasks in the context of cryptocurrencies. One BTCE will correspond to 0.001 BTC. According to the information available, prices are formed across various crypto exchanges to ensure liquidity. BTCE will be bought with Fiat, while investors will be able to choose between Fiat or payment in BTC. The annual management fee is 2 percent, plus issuing and selling fees that are not yet precisely defined.
One advantage of BTCE, according to the company’s own description, is that Bitcoin can be purchased without direct involvement of crypto exchanges and technical details such as wallet or private keys. Another important and unique feature is the central clearing house, which is guaranteed by Xetra. Last but not least, HANetf has the expertise to place innovative financial products on the market as ETPs, be it medical cannabis or cloud technology.
The naming of BTCE is somewhat confusing. In the announcement text three financial instruments are mentioned in connection with BTCE: Exchange Traded Cryptocurrency (ETC), Exchange Traded Product (ETP) and Exchange Traded Fund (ETF). The closest approximation to BTCE is probably the comparison with a Bitcoin ETF, an investment form that has not yet been approved in the USA, but which focuses on physical hedging of the asset class.
Bitcoin at Xetra – an alternative to crypto exchanges?
An exact date for the first trading day of BTCE is not yet known. Private investors will then receive access via their house bank or broker. In concept, BTCE sounds serious due to the physical and controlled coverage of deposited Bitcoins, the approval by BaFin also speaks for this. But there are still open questions such as fee policy and pricing.