ETC Group to launch bitcoin ETP on Deutsche Boerse

[DoubleEdgeEX]

It´s not through yet, it still needs the Bafin confirmation. That could take several weeks or make it even outright impossible to launch. It´s a good idea and worth watching how it develops but at the moment it´s just an announcement for a future release. Beside that, I don´t know how far their custody provider BitGo is cooperating with the German regulatory folks already, could be another obstacle if they need to apply for a certain license.

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[fillippone]

It´s not through yet, it still needs the Bafin confirmation. That could take several weeks or make it even outright impossible to launch. It´s a good idea and worth watching how it develops but at the moment it´s just an announcement for a future release. Beside that, I don´t know how far their custody provider BitGo is cooperating with the German regulatory folks already, could be another obstacle if they need to apply for a certain license.

As far as I know the product has been already approved.
Citing the previous article:

From a regulatory perspective, the product has been approved by BaFin, the German financial regulator, which announced in March that it officially recognized cryptocurrencies as financial instruments.

Listing should commence on Jun 17th.

If you have different information, please share.

Regarding BitGo cooperation, yes this is certainly an interesting topic under many aspect. I suspect they will "analyse" the bitcoin they buy with a certain degree of care. It wouldn't surprise me giving priority to "clean bitcoins" e.g. Bitcoins from government auctions or coinbases.  (block rewards, not the anti-bitcoin organisation).

[fillippone]

Gentle reminder.
Today is the day of the first trading of this product.
I fear a BAKKT-style launch. Great expectations, but delusion.
We will see. Your fellow Fillippone still has to discover the wallet addresses (should be public) where to track ETC holdings.
I will keep you posted.


EDIT: Nothing is currently trading, apparently delayed until tomorrow.

[fillippone]

As I spread the fake news that the first day of listing would have been the 17.06.20 (actually I double checked with some external reference who still is in denial of reality), I felt a little bit in debt with the forum.

To cleanup my guilt I wrote an educated, typo free email and I contacted them.

They confirmed to me that:

• The first day of listing will be 18.06.20
• From next week the addresses of the wallets where the Bitcoins of the subscribers are kept will be publicly available

I think the second information is quite relevant. As it will allow the general public to closely monitor the subscription dynamics of that fund and eventually detect frauds (fractional reserve or other nonsenses) looking at official exchange numbers and blockchain mirror equivalent amounts.

[fillippone]

Now that the first trading day it's over, let's see a few things:

First of all the price EUR 4,855 for each share.



They traded 31,463 ETC shares; for a value of almost 270,000 EURO



/ From the hanetf website we see the most interesting things:



Firstly we notice that the number of bitcoins controlled by each share has already decreased compared to the termsheet value of 0.001: every day the daily rate drops by 2% annually.
Basically the number today is

(Bitcoins For ETC)_t=(Bitcoins For ETC)_t-1 * (1-2%*gg/360)

Where gg = calendar days between t and t-1

Multiplying the price of the Bitcoin reference index by the Crypto entitlement we have the NAV value, expressed in dollars (the fund is quoted in different currencies and the official NAV is uniquely expressed in USD).
Well, the first, positive, surprise is that if we convert the NAV to EUR ( I used an FX rate of 1.12) we get a value equal to 8.46
That is, absolutely comparable with the market price (it is possible that there are differences due to the different detection methods).
In the thread on Grayscale we have highlighted how the absence of a premium on the market price compared to the NAV can lead to have considerable interest in this tool.

[exstasie]

In the thread on Grayscale we have highlighted how the absence of a premium on the market price compared to the NAV can lead to have considerable interest in this tool.

Yep, I've been speculating that GBTC will be increasingly arbitraged from here on out as regulated securities and derivatives become more commonplace.

Why hold GBTC shares (especially if you bought through private placement) when you could pocket the 15% (>30% at times) premium, take the cash and buy a similar security near spot? Seems like a no brainer to me!

[fillippone]

In the thread on Grayscale we have highlighted how the absence of a premium on the market price compared to the NAV can lead to have considerable interest in this tool.

Yep, I've been speculating that GBTC will be increasingly arbitraged from here on out as regulated securities and derivatives become more commonplace.

Why hold GBTC shares (especially if you bought through private placement) when you could pocket the 15% (>30% at times) premium, take the cash and buy a similar security near spot? Seems like a no brainer to me!

I have tried to explain in that thread. For instance, for many investors the interaction with GBTC are not taxable, or at least, are not immediately taxable. This could explain a lot. Also, many cannot buy other shares than GBTC's.

For sure this product, if successful, is going to put a lot of pressure on GBTC's shares.

[fillippone]

A small overview of what has  happened during the first few days from the start of the listing of this ETC.

The listing started on the 18th, and the market has been fairly stable these days as we see:



In terms of volumes, in short, it was a fairly "tame" launch. Reminds me BAKKT launch, hopefully it will have more success than BAKKT.
Anyway it's too early to call.

Today is the record of volumes, almost 70,000 lots, equivalent to 70 BTC. More than double the volume of the first day, the previous record with 31,000 traded shares.

Definetly, the NAV performance is interesting. As you can see, also thanks to the low volatility of the underlying, the NAV has been very much aligned with the price.
Remember that the NAV on day t is calculated on the basis of bitcoin prices on day t-1, so some "misalignment" is possible in periods of high volatility.



But you see that price and NAV are extremely aligned: considering also the volatility of bitcoin, the variance has always been less than 1%.
I would say an excellent level, especially if we compare this value with the 20% premium recorded on the shares of the GrayScale fund.

From the first day I think we had a clear sign of the main characteristic of this instrument: a share price very closely refletcting the underlying Bitcoin price pattern, without the distrotions implied by the premium over the NAV embedded in GrayScale share price.

[fillippone]

Update on the first month of quotation.



AS we have seen, the price closely match the NAV valuation: the price had a maximum difference of about 3.46%. Just remember GrayScale in this moment has more than 10% premium over the NAV.
Volumes have been quite good, even if in this graph we can discover how much of that volume really became NAV at the end of the day. Wee see that volume has been not great, and actually on July 3rd we had more withdrawal than subscriptions, leading to an outflow from the Asset Under Management.

I think the guys can be satisfied from this month: NAV has been closely tracked, this I think was the first and main objective to achieve. Volumes will follow. Price action in BTC, rather the price NOT action, led to a lack of ideas generating moment that usually lead to investments of this kind.

[jademaxsuy]

Do this group need to ask permission from german government? I do not think that the group could easily launched a good project there knowing that most of the government does not allow or prohibited their community to join in cryptocurrency due to the negative news dragging the name of cryptocurrency. Well, if this has been plan then of course this is really a good news to all especially those who had been had already earn their crypto.

Anyway, hoping for the best of the team and the german community. This could be a good start and it may have the chance to integrate other products with cryptocurrency im their place.

[fillippone]

Do this group need to ask permission from german government? I do not think that the group could easily launched a good project there knowing that most of the government does not allow or prohibited their community to join in cryptocurrency due to the negative news dragging the name of cryptocurrency. Well, if this has been plan then of course this is really a good news to all especially those who had been had already earn their crypto.

Anyway, hoping for the best of the team and the german community. This could be a good start and it may have the chance to integrate other products with cryptocurrency im their place.

Of course they had all the necessary authorisation, you don't get listed on Xetra if your product doesn't tick all the checkmarks.
Please be aware that Germany has actually one of the most advanced legislationsion in Europe regarding cryptos, so your statement about attitude toward cryptocurrencies are a little bit overstated.

[gentlemand]

This has turned up on a few investment platforms in the UK and it can be put in a tax free wrapper too. If I had a large amount of fiat I'd give it some thought, but I don't.

[fillippone]

This has turned up on a few investment platforms in the UK and it can be put in a tax free wrapper too. If I had a large amount of fiat I'd give it some thought, but I don't.

Very interesting.
I am not familiar with such wrapper structures. I think something similar exists in Italy, but they require very large amount of fiat and very long investment horizons.
I lack both, I am afraid.

[gentlemand]

Very interesting.
I am not familiar with such wrapper structures. I think something similar exists in Italy, but they require very large amount of fiat and very long investment horizons.
I lack both, I am afraid.

In the UK they're called ISAs - Individual Savings Account.

You can have normal fiat savings in them or you can put stocks in them. Everyone gets an annual allowance to put in, £21,000 ish, and you can transfer previous years into other ISAs and keep whatever gains tax free.

Every financial institution will offer them and there are no rules about periods of time or anything. It's up to whoever issues it.

They've been going for quite a few years now so some people will have built up a substantial amount of tax free money.

[gentlemand]

This is starting to gather some decent momentum. Last time I checked it had 1000 BTC. Latest figure is 3800.

Volume is well on its way up too - https://www.boerse-frankfurt.de/en/etf/de000a27z304-etc-issuance-gmbh-0-000/price-history/historical-prices-and-volumes

They may well have launched at a very fortuitous time.

[fillippone]

This is starting to gather some decent momentum. Last time I checked it had 1000 BTC. Latest figure is 3800.

Volume is well on its way up too - https://www.boerse-frankfurt.de/en/etf/de000a27z304-etc-issuance-gmbh-0-000/price-history/historical-prices-and-volumes

They may well have launched at a very fortuitous time.

Well, I did check the same today and I had a very similar thought.
Really gaining momentum right at the start of the launch might not be really important, as the race is not a sprint, rather than a marathon.
Of course I think anyway having a decent movement in the underlying is halping this fund gather some momentum to keep the steam boiling.
Alos, I still haven't checked, this but given the very high premium in the NAV of Grayscale, also they could be possibly being "stealing" some volume from the biggest fund.
And this is something I would like very much to see, as it means the market are slowly evolving toward a more competitive form.

[fillippone]

An image is worth a thousands words:



We see in this image the huge flow the fund experienced during the last bull run.

In this spreadsheet I computed the BTC held under the fund: as said, there was a massive growth until the present value of more than 3870 BTC:



Please note the preium is confirmed to be really low, and the impressive growth of BTC held.

EDIT: corrected an error on the database in the worksheet, updated the graph and added a few computation on the worksheet.

[gentlemand]

I didn't realise they had a public address but this it is apparently for anyone interested - https://www.blockchain.com/btc/address/35pgGeez3ou6ofrpjt8T7bvC9t6RrUK4p6

It'll be intriguing to see how rapidly it grows. I'm now pondering having a small dabble.

[fillippone]

I didn't realise they had a public address but this it is apparently for anyone interested - https://www.blockchain.com/btc/address/35pgGeez3ou6ofrpjt8T7bvC9t6RrUK4p6

It'll be intriguing to see how rapidly it grows. I'm now pondering having a small dabble.

Very nice find! I was actively looking for this address, but I failed to find it. Can you share your source please?
At least it closely resemple my "BTC HELD" graph....

[gentlemand]

Very nice find! I was actively looking for this address, but I failed to find it. Can you share your source please?
At least it closely resemple my "BTC HELD" graph....

The address is published here https://btc-etc.com/product/#cryptocurrencyetps in the 'structure' section of the technical data tab after clicking 'more'.

This one gives a clearer impression of the growth rate - https://bitinfocharts.com/bitcoin/address/35pgGeez3ou6ofrpjt8T7bvC9t6RrUK4p6

Early days still but impressively rapid. Nearly 2000 BTC added in a week.