Invesco Launches ‘Physical’ Bitcoin ETP In Europe

Shortly after withdrawing a futures-based offering in the U.S., the asset manager has entered Europe with a spot-based one.

• Invesco has launched a bitcoin exchange-traded product in Europe.
• The Invesco Physical Bitcoin fund is listed on the Deutsche Boerse under the ticker symbol BTIC.
• The offering is “physically”-backed by bitcoin and tracks the CoinShares reference price index, minus fees.

Asset manager Invesco has launched a spot bitcoin exchange-traded product (ETP) in Europe, reported ETF Stream. The offering is “physically” backed by actual bitcoin and tracks the CoinShares Bitcoin Hourly Reference Rate index, seeking to deliver the performance of BTC minus fees.

“In the last two to three years, we have been trying to structure a product that looked, from an institutional point of view, as close as possible to a traditional ETF like our gold structure, and that has been the driver of BTIC’s timeline,” Gary Buxton, head of EMEA ETFs and indexed strategies at Invesco, told ETF Stream.

“We have been pushed over the last couple of years by institutional clients and had to look at how we can access this space well,” Buxton added. “Most of the discussions we have with clients are not really about bitcoin itself but more about the access to bitcoin and how you get comfortable with segregation, how you get comfortable with valuation. Really, one of the strengths of ETPs is as an access vehicle.”

The Invesco Physical Bitcoin ETP is listed on the Deutsche Boerse under the ticker symbol BTIC with a total expense ratio (TER) of 0.99%. The product is targeted at institutional investors seeking a more convenient investment vehicle for bitcoin price exposure.

“Custody of bitcoins held on behalf of BTIC will be performed by FCA-registered and UK-based Zodia Custody,” per the report. The custodian incubated by Standard Chartered subsidiary SC Ventures received regulatory approval at the end of this summer. Northern Trust will act as the administrator for BTIC, while CoinShares will serve as the product’s index sponsor and execution agent.

By holding actual bitcoin, BTIC has a better shot at performing similar to spot BTC than bitcoin-linked offerings such as derivatives-based products or trusts like GBTC, which is currently trading at a discount.

BTIC is technically an exchange-traded note (ETN), a reference name that differs from the more common exchange-traded fund (ETF). However, the differences are primarily in semantics, as VanEck director Gabor Gurbacs explained.

“In Europe, only baskets of securities can be called Exchange Traded Fund (ETF),” Gurbacs tweeted. “Most single-asset commodities are structured as an Exchange Traded Note (ETN). Some are physically backed and some are certificates/bank-backed. Exchange Traded Product (ETP) is the umbrella category.”