Investment firm Invesco has partnered with crypto index provider CoinShares to offer its first ETP backed by physical Bitcoin in the European Union. The asset manager, which manages $1.3 trillion in assets has launched a spot-based offering in Europe after withdrawing a futures-based one in the U.S.

The Deutsche Börse Xetra, Germany's stock market for equities and exchange-traded funds, will list the Invesco Physical Bitcoin ETP, which is backed by physical Bitcoin.

These financial instruments make it easier for traditional investors to gain exposure to crypto without having to own the assets. In many ways, they are similar to exchange-traded funds (ETFs), as they track the performance of an underlying asset.

Gary Buxton, Invesco's EMEA ETFs and indexed strategies head, said, “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.”

Soon after SEC chair, Gary Gensler indicated that he preferred a Bitcoin futures ETF over a physical asset-linked ETF, Invesco became one of the first firms to apply for a Bitcoin futures ETF in August.

However, a combination of reasons led the firm to discontinue its pursuit of a futures application in October.

Regarding its decision in Europe to opt for a physical Bitcoin ETP rather than a futures-based Bitcoin product, Invesco's Gary Buxton, said that a physical Bitcoin ETP is more observable than a Bitcoin futures-based product.

Invesco is still hopeful that its joint application with Galaxy Digital in September for a spot Bitcoin ETF will get regulatory approval in the US. 

Pavan A

CBW - External Analyst

INDIA