Invesco has announced the launch of a Bitcoin ETP (exchange-traded product) aimed at giving institutional investors a “straightforward and effective” exposure to the cryptocurrency.
Invesco is a global independent management firm with a Luxembourg presence in Kirchberg, Invesco Management S.A.
According to company’s 29 November press release, the Invesco Physical Bitcoin ETP has a structure similar to Invesco’s “well-established” physical gold product and will be “100% backed” by holdings in the underlying digital asset and is aimed at delivering the price performance of Bitcoin, less a fixed 0.99% annual fee.
While the Physical Bitcoin ETP is Invesco’s first product directly linked to digital assets, the firm said that it has “offered investors exposure to the underlying blockchain technology” for more than two years via an exchange-traded fund.
Institutional grade struggle
Bitcoin (BTC) accounts for 42% of the US$2 trillion cryptocurrency market. With more than $2 billion worth of Bitcoin traded on digital exchanges around the world every day, it is the most the liquid. However, despite its size and liquidity, “many sophisticated professional investors have struggled to find a sufficiently robust “institutional grade” mechanism through which to invest.”
“We’ve had numerous conversations over the past year or so with institutional investors who wanted to include an allocation to cryptocurrencies into their portfolios,” said Gary Buxton, Head of EMEA ETFs and Indexed Strategies at Invesco. “The most common questions were around the practical aspects of investing, such as the custody of assets, risk management, trading and valuation. Interestingly, people used to ask the same questions about physical gold products.
Invesco is presenting the fund in partnership with CoinShares, the largest digital asset manager in Europe, with custody services offered by Zodia Custody, a UK-based digital asset custodian. Zodia Custody was incubated by SC Ventures, the innovation arm of Standard Chartered. Northern Trust is a co-investor in Zodia Custody and the administrator for the Invesco ETP.