Invesco- a US investment company with over $1 trillion assets under its management, is now partnering with Coinshares to launch its first European product, Bitcoin ETP. This announcement comes a few days after the Invesco Manger withdrew a filling for a Bitcoin ETF in the US. An ETP. is similar to an ETF.
Crypto-backed ETPs are gaining attraction in Europe and specifically in Germany and Switzerland. The ETP is now listed with the Deutsche Borse exchange platform Xetra.
Boerse officially announced the Invesco Bitcoin ETP on its exchange platform Xetra. The Bitcoin ETP will now be trading as BTIC. BTIC is currently admitted to the regulated market in the Frankfurt stock exchange and will receive backing from Bitcoin.
According to Xetra, BTIC is fully backed by the assets in Invesco, and that its major function will be tracking the Coin Shares Bitcoin RRI on an hourly basis and indicating its price performance.
Why Invesco Withdrew Its Filling
Invesco is among the first companies that made applications for Bitcoin ETF, with SEC preferring the product from Bitcoin itself. However, it withdrew the application because of the SEC’s insistence on ETF total exposure
“ Our hope was that the ETFs will be a practical part of our profile. But we never knew that effectiveness will be achievable when the product is 100%. We, however, have other best ways of giving exposure to our investors.”
This forced the company to go for the Bitcoin ETP in Europe ahead of the EMEA ETFs. According to Invesco, Bitcoin is much more observable, unlike what SEC claims. According to Invesco, this would have cost an investor a fortune.
The big idea was to have a mixture of ETFs and Bitcoin and private fund investing to help protect their investors if a liquidity crash happens.
According to Buxton, the primary concern here is the depth of the liquidity and what it may do to valuations over time. He also adds that BTIC has been in operation since 2018. Invesco is now trying to structure the product to function as the original ETF.
Invesco still hopes to receive approval for its application. However, SEC is still yet to give the go-ahead on this product, and in the meantime, the Bitcoin ETP is very much welcomed by investors.
Invesco also says that they will be working with Galaxy Digital to give their investors a product that will give exposure and transform the Bitcoin ETF.
Does Bitcoin ETF Have a Future?
According to Invesco, Bitcoin ETP is highly competitive. However, Invesco is not the first to withdraw its filings from the SEC; recently, Bitwise also realized they could not continue filing.
SEC is still reluctant to approve the Bitcoin ETF. Spot Bitcoin ETFs are increasingly growing in the US. With time, SEC will have to give in to the pressure as more and more applications come into their dockets. Soon Bitcoin ETF will become a reality, probably in 2022 and beyond.
Therefore lots of crypto considerations must take place before it takes off. As of now, it is a potential sleeping giant.