Monday 7 June 2021 1:06 pm

UK’s first cryptocurrency ETP launches as institutional demand for crypto returns

CryptoCompare data shows the price of Bitcoin (BTC) has moved chiefly sideways throughout the week, starting at $36,000 and at one point rising to test the $40,000 mark, before it plunged to $35,000. At the time of writing, BTC is back to $36,000.

Ethereum’s Ether – the second-largest cryptocurrency by market capitalisation – dropped from $2,700 at the beginning of the week to $2,650 before recovering and testing the $2,800 mark. Its advances were initially rejected, but ETH is now back to $2,780.

This week was marked by the launch of the UK’s first cryptocurrency exchange-traded product. The ETP, the BTCE Bitcoin ETP, is being listed on the Acquis Exchange and is from digital asset securities provider ETC Group.

It’s the first Bitcoin exchange-traded product (ETP) being traded on any UK market. Transactions will take place in GBP, EUR, USD, and CHF, with clearing being carried out by the Swiss Stock Exchange. Regulators have so far stopped other attempts to list cryptocurrency-backed products on UK exchanges. but the ETC Group’s Bitcoin ETP managed to list because the clearing of transactions takes place in Switzerland.

The launch came after three cryptocurrency ETPs were listed on the Euronext Paris exchange earlier this month. Two of the ETPs give investors exposure to Bitcoin and ether, while a third product is a “short Bitcoin” ETP.

Cryptocurrency exchange-traded products allow investors to gain exposure to the underlying asset without managing its public and private keys. Some investors may want to gain exposure to cryptocurrencies as a potential hedge against inflation. These ETPs were listed amid returning demand from institutional investors

According to CoinShares, institutional investors invested $74 million in the cryptocurrency space last week, following record outflows the previous two weeks. Outflows remained focused on BTC investment products, while inflows were mostly focused on Ethereum, Cardano, Polkadot, and XRP.

Ethereum-related products now represent more than one quarter of the total assets under management (AUM) of cryptocurrency investment products. Despite ETH’s recent inflows of $147.9 million, Bitcoin products still dominate year-to-date inflows with nearly $4.4 billion, compared to Ether’s $973 million.

Institutions may be betting on Ethereum and other cryptocurrencies with a smaller carbon footprint than Bitcoin over environmental concerns raised by Tesla CEO Elon Musk. Nevertheless, Bloomberg published a report arguing that Bitcoin is “on track to hit six figures” this year, while suggesting ETH could overtake its market capitalization.

Similarly, JPMorgan released a report claiming the cryptocurrency could still hit $145,000 in the future, but pointing out that the flagship cryptocurrency’s price may drop further in the short term.

Bitcoin mining firm stops censoring transactions

Bitcoin mining firm Marathon Digital Holdings has revealed it will update to Bitcoin Core version 0.21.1 and will validate transactions on the BTC blockchain “in the exact same way as all other miners who use the standard node”.

The Bitcoin mining pool run by Marathon – MaraPool – has described itself as an “OFAC (Office of Foreign Assets Control) compliant” pool. To “stay compliant” with regulatory standards, it pledged to exclude from the blocks it mines are transactions from addresses associated with sanctioned entities. Its stance drew criticism from the BTC community after it announced it mined a “fully compliant block” by censoring some transactions.

Marathon CEO Fred Thiel is now seemingly taking the firm in a new direction, saying in an announcement it was looking forward to continue being a collaborative and supportive member of the Bitcoin community.

Over the week the Human Rights foundation’s Bitcoin Development Fund awarded $210,000 to three Bitcoin Core contributors, two Lightning Network wallet developers, and an Arabic translator. Grants help professionals keep working on the open-source Bitcoin protocol, and a number of companies often award them.

The week also saw Google lift a nearly three-year-old policy that banned cryptocurrency exchanges and wallets from advertising on its platform. Beginning on August 3, “cryptocurrency exchanges and wallets targeting the United States may advertise those products and services when they meet the following requirements and are certified by Google”.

READ MORE: Google slowly opening its doors to cryptocurrency advertising

The initial ban surrounding crypto ads was originally put in place in 2018 when the search giant created strict policies to counteract the ICO craze that was happening at the time, at one point, even blacklisting the word “Ethereum” from ads.

Peer-to-peer cryptocurrency marketplace Paxful has announced the launch of a new e-commerce tool Paxful Pay, which allows any business to accept bitcoin payments.

Francisco Memoria is a content creator at CryptoCompare who’s in love with technology and focuses on helping people see the value digital currencies have. His work has been published in numerous reputable industry publications. Francisco holds various cryptocurrencies but has no bias in his writing.

Featured image via Unsplash.