Now, alongside equities and derivatives, you will find that XRP and Litecoin LTC will also be trading on a completely regulated platform. How was it made possible? Well, recently, Europe’s financial authorities gave a green signal to the mentioned cryptos to be rolled into new financial products.
Today, you will see two new ‘exchange-traded products’ ETPs- the XRP Tracker One and the Litecoin Tracker One. They will be released on the Swedish Financial Supervisory Authority (FSA) regulated crypto exchange- ‘Nordic Growth Market (NGM).’
The advantage with these ‘exchange-traded products’ is that the traders and the investors will be able to get exposure without the compulsion of owning underlying assets. These ETPs will have set amount of XRP and LTC. These ‘exchange-traded products’ are fully regulated. They come with ISIN numbers which are the legitimate security identities. The developer XBT Provider had to put in a lot of hard work to get the new products accepted in the traditional system. XBT Provider was also behind the first ever tradable BTC-based security on Nasdaq Stockholm exchange in 2015.
Boerse Stuttgart is the second largest exchange in Germany. It owns NGM. NGM is dedicated to licensing entities with minimum €730,000 in the capital. Some examples of it are- Citigroup, Danske Bank, and Morgan Stanley, Europe. The NGM members encouraged the crypto exchange to increase the digital asset offering which in turn lead to the development of the exchange. The Deputy CEO of the exchange- Tommy Fransson said that it was due to the demands of investors that the tracking products came around. In the future, there can be collaborations with XBT Provider in order to offer new crypto products.
The CEO of CoinShares- Ryan Radloff said that these new products enable the traditional investors to participate in the crypto market while still maintaining the regulation and the familiarity of the trading platform.
ETPs can be considered as a middle way which allows the user to track an asset’s value, and they very much function as stocks in certain respects. It covers a range of tracking of products such as commodities, cryptocurrency, and equities. In recent times the volume assets held in ETFs has doubled from 2 trillion USD to 4 trillion USD since 2008 financial crunch.
If a trader is looking for long-term exposure, ETPs are usually suitable for them as they can be a source of passive income. The ETPs are usually invested in because they offer a potential for their value to increase in the future. This computes a general positive relation between market sentiment and the amount which a trader invests. And similarly, when the valuation of ‘exchange-traded products’drop, the equities also follow a similar trajectory.
The institutional clients of NGM were aiming at an increase in the crypto offering and freedom from the dependency on the crypto exchanges. The approval of the ETPs by the Swedish authorities and the hard work gone in for getting the regulated by the XBT provider reflects that there must have been a good demand from the customers. The quality of ‘exchange-traded products’ of enabling the user to take out a ‘long’ (long-term place on the assets), is a reflection that despite the short-term turbulence, the institutional perspective on XRP and Litecoin LTC is quite positive.
It is still to be known how bullish the giants such as Citi and Morgan Stanley are on these assets. The scenario looks quite positive. With such moves into the traditional financial sector, it looks like the crypto industry is getting more and more embraced with every passing day.