Several products indexed to bitcoin and ethereum are launched on June 1 by two exchange-traded instrument promoters. Meanwhile, international regulators are raising their voices.
Crypto-currencies are now tradable on exchanges, not just on dedicated platforms.
Vaneck and 21Shares, the US and Swiss specialists in exchange-traded products (ETPs), are launching five funds indexed to the evolution of bitcoin and ethereum, the two most popular digital assets.
After Deutsche Boerse, the products will be listed on the regulated market of Euronext Paris from June 1.
"We are very proud to be the first provider to allow investors in France and the Netherlands to access our two crypto-currency products on their national exchanges and thus set a milestone for this asset class"says Martijn Rozemuller, CEO of Vaneck Europe.
The distributor promotes the two underlying assets in passing: " Since the maximum amount of bitcoins in circulation is capped (at 21 million in 2140, ed.) and the amount of newly created bitcoins keeps decreasing, the crypto-currency is often referred to as digital gold. Bitcoin's impressive rally over the past few years has made it an attractive investment alternative for many investors."
Safe deposit box in Liechtenstein
Same advantageous presentation for ethereum :
"The ethereum platform has many other uses in addition to its use as a crypto-currency. It has become an important component of many blockchain-based digital applications, such as decentralized financial solutions or tokenized assets (e.g., non-fungible tokens - NFT)."
Vaneck guarantees that the money invested in the index funds is actually converted into crypto-currencies, which are kept in a vault, a regulated depository established in Liechtenstein.
Playing the bitcoin down
For its part, the Swiss 21Shares launched on the same day two funds indexed to bitcoin and ethereum, to which is added an instrument designed to bet on the decline of bitcoin.
"Investors can benefit from exposure to crypto-currencies without being hindered by either the complex storage process or the regulatory constraints that apply to crypto-currency trading applications"Laurent Kssis, managing director of 21Shares' ETP business, said.
"This new development welcomes France's support for blockchain, in particular the efforts of regulatory authorities to promote the blockchain, fintech and crypto-currency industry in France"He adds.
Regulatory perimeter
The launch of these products comes at a time when regulators are raising their voices and calling for oversight of crypto-currencies. In an interview with the Financial Times, Michael Hsu, the new chairman of theOffice of the Comptroller of the Currency (OCC), an independent U.S. authority tasked with overseeing banks, is calling on U.S. regulators on Monday to work on defining a "regulatory perimeter" for crypto-currencies.
In mid-May, Chinese authorities sounded the alarm about speculation related to these instruments. They also banned financial institutions and payment services from providing crypto-currency transaction services. A thunderous move that caused a collapse of these assets. Since its April 14 high of $64,895, bitcoin has lost nearly half its value.