Deutsche Digital Assets (DDA), a German crypto asset manager, has expanded its provision of Bitcoin exchange-traded products (ETPs) by listing its DDA Bitcoin Macro ETP on Euronext Paris.
This is the second exchange on which the ETP has been traded, following its inaugural launch on Xetra, the electronic trading platform of Deutsche Börse.
The DDA Bitcoin Macro ETP (BMAC) is physically backed by a basket of cryptocurrencies comprising the Compass FT DDA Bitcoin Macro Allocation Index (DDAMACRO), as stated in the announcement from September 17.
At Coinbase Custody International Ltd., a regulated custodian, the ETP is stored in secure cold storage.
The ETP has a total expense ratio (TER) of 2%.
Increasing the Variety of Crypto Investment Opportunities
Dominik Poiger, Chief Product Officer of DDA, stated, “The only macro ETP on Bitcoin is now even more accessible and cost-effective for investors from France, thanks to the listing on Euronext Paris.” Additionally, he stated:
“The Bitcoin Macro ETP represents a truly unique product that is not simply another cryptocurrency wrapped into an ETP but gives investors exposure to Bitcoin while trying to protect against adverse macro environments.”
The introduction of BMAC on Euronext Paris is a valuable addition to DDA’s current portfolio of crypto ETPs available on various European exchanges. These include DDA Physical Bitcoin ETP (XBTI), DDA Physical Ethereum ETP (IETH), and DDA Crypto Select 10 ETP (SLCT).
The DDA Bitcoin Macro ETP monitors the Compass FT DDA Bitcoin Macro Allocation Index. This quantitative model evaluates real-time macroeconomic factors and ascertains the most advantageous allocation between Bitcoin (BTC) and U.S. currency Coin (USDC), a stablecoin pegged to the U.S. currency.
The index’s quantitative model provides an analysis of four critical macroeconomic factors:
Global Growth: This factor is associated with assets susceptible to global economic expansion, including high-yield bonds and U.S. cyclical equities.
Monetary Policy: This factor is linked to assets influenced by changes in U.S. monetary policy, such as gold and emerging market sovereign bonds.
The U.S. dollar is a factor that is associated with exchange rates.
Eurozone Risk: This factor is associated with assets that may be affected by the European Monetary Union risks, including the CHF/GBP exchange rate and Italian sovereign spreads.
Each factor is represented by a collection of assets most susceptible to that specific factor.
The model generates individual sub-signals by calculating a momentum score for each factor. The final investment signal results from weighting these sub-signals based on their explanatory power for Bitcoin price movements over a 6-month continuous window.
The strategy will increase its allocation to Bitcoin in risk-on macroeconomic environments while shifting its focus to USD Coin in risk-off conditions to protect capital.
This asset allocation strategy may be particularly appealing to investors apprehensive about the high volatility typically associated with Bitcoin and other cryptocurrencies, as it offers a way to balance the high returns of Bitcoin with the necessity of managing risk.
Although the U.S. market was making headlines with its spot Bitcoin and Ethereum exchange-traded funds (ETFs) approvals, Europe has been a pioneer in the crypto ETP space for a long time.
Over the years, several asset managers, including 21Shares, WisdomTree, ETC Group, Valour, and Fidelity, have successfully listed various cryptocurrency exchange-traded products (ETPs). This has exposed investors to digital assets such as Bitcoin and Ether (ETH).
According to Trackinsight, the total asset under management (AUM) of Europe’s crypto ETP market was approximately $12 billion as of June 28. Nevertheless, it is essential to acknowledge that North America remains the primary market for crypto ETPs despite the substantial figure.
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