A ‘physical’ Litecoin ETF is coming to Germany’s Xetra exchange


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ETC Group, a specialist provider of cryptocurrency-backed securities, said it would list the Physical Litecoin exchange-traded product (ELTC) on Deutsche Boerse’s XETRA on Wednesday, as per a release.

It follows on the success of the Group’s Bitcoin product (BTCE), which reached over $1 billion in assets in just seven months since listing, proving the growing demand for products that enable investors to dabble in cryptocurrencies minus the safety and regulatory concerns.

All about the Litecoin ETP

ETPs are listed on a regulated exchange and investors buy them through regulated brokerages. These are some of the most robust ways to trade and invest in cryptocurrencies and can be traded by investors in the same way as traditional equities.

ETC Group’s ELTC is structured as asset-backed debt security issued in Germany and is marketed and distributed by HANetf. It will track the price of Litecoin, allowing investors to—invest in the cryptocurrency in a regulated and safe manner.

The ETP is the first Litecoin product to be listed on Xetra and will be central counterparty cleared (meaning the ETC Group will act as both the buyer and the seller of the ELTC product in the market). It has a management fee of 2%.

“Litecoin has grown by 342% 6 in the past 12 months and is the ninth-largest cryptocurrency by market capitalization at $14.6 billion 7 with growing interest from institutional and retail investors. It’s often talked about as the silver to Bitcoin’s gold,” stated Bradley Duke, CEO of ETC Group.

He added:

“In contrast to previous rallies in cryptocurrencies, the current one is the first to be supported by both retail and institutional investors, making this the ideal time to launch ELTC.”

The success of institutional Bitcoin products

Duke noted that the coronavirus-stricken economy and uncertainty have caused investors to increasingly consider investing in the crypto market, as they both offer opportunities for diversification from traditional assets while providing ‘hedging’ against inflation.

It’s a sentiment that has been shared by high-profile investors like Paul Tudor Jones and tech companies like MicroStrategy and Tesla in the past year.

Meanwhile, the Litecoin product is the third crypto ETC from ETP Group. Early April saw the release of the ETC Group Physical Ethereum ETC (ZETH)—it tracked the price of Ethereum—which was the first Ethereum ETP to be listed on the Deutsche Borse.

The launch follows the huge success of ETC Group’s first product, the BTCetc Bitcoin Exchange Traded Crypto (ticker BTCE), which launched on XETRA last June. It has since seen its assets under management grow to over $1 billion in just seven months.

As of press time, the BTCE had a turnover of 925 million on Xetra in February with a market share of 79.4% of the ETN segment of Xetra. It ended up becoming the most traded ETP across the whole of the exchange.

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