Competition for crypto assets in Europe continues at a fever pitch as ETC Group has followed CoinShares in launching a litecoin exchange-traded product (ETP).
The ETC Group Litecoin ETC (ELTC) is set to list on the Deutsche Boerse on 14 April with a total expense ratio (TER) of 2%.
Becoming the first Litecoin ETP to list on the German exchange, ELTC will track the price of litecoin and enable investors to back crypto with the added security of central counterparty clearance (CCP).
This centralised mechanism offers crypto investors the same regulatory protections as share traders, with a regulated exchange listing designed to reduce counterparty risk when trading.
Recently approved by the Federal Financial Supervisory Authority (BaFin), ELTC is physically replicated and offers investors a redemption feature for a sum of Litecoin defined at the point of purchase.
ELTC’s launch is set against the backdrop of litecoin rallying 342% over the trailing 12-month period, becoming the nineth-largest cryptocurrency by market cap.
Bradley Duke, CEO of ETC Group, said institutional backing sets the current crypto rally apart from past bull runs, and added demand for secure, liquid and CCP products will bolster support for the ETP structure.
“The current economic uncertainty has underlined the attraction of crypto assets for investors as they offer opportunities for diversification from traditional assets such as equities and bonds, and strong hedging qualities against inflation,” Duke added.
“But it is a crowded market with more than 8,700 cryptocurrencies, making it difficult for investors to select assets and to store and manage them.”
ELTC will be marketed and distributed by white label issuer, HANetf, with the companies previously collaborating on the launch of ETC Group’s first product, the BTCetc Bitcoin Exchange Traded Cryptocurrency (BTCE).
The pair also partnered to launch the ETC Group Physical Ethereum ETP (ZETH) on 9 March, the joint-first centrally cleared ethereum ETP to launch in Europe, alongside the 21Shares Ethereum ETP (21XE).
CoinShares was the first issuer to launch a litecoin ETP, the CoinShares Physical Litecoin (LITE), on the SIX Swiss Exchange on 6 April.