Cryptocurrency fund manager 21Shares is cutting its fees and launching an exchange-traded product (ETP) tracking Bitcoin in an effort to draw investors back to crypto.
Undercutting even its own flagship Bitcoin products, 21Shares’ Bitcoin Core ETP comes with a total expense ratio of just 0.21%. For reference, similar products tied to Bitcoin offered by Fidelity and Global X are offered at between 0.4 – 0.7%.
Meanwhile, 21Shares’ existing $164 million flagship Bitcoin ETP (ABTC) levies a relatively heftier fee of 1.49%.
“Some of our customers are more cost sensitive than others, so we have been working very diligently to develop what is, by far, the world’s cheapest crypto ETP,” said Hany Rashwan, chief executive and founder of 21Shares. “We are focused on developing bear market products.”
However, the Zurich-based group’s new crypto products also comes with a catch. In return for such a cheap rate, 21Shares can potentially lend out the holdings and thereafter pocket some revenue.
This latter detail is because cryptocurrency ETPs do not fall within Europe’s Ucits fund regime, which imposes stricter limits on securities lending.
While 21Shares is currently not lending out any funds, Rashwan said: “It’s very possible [we] will in the next month or two months. We will opportunistically lend.”
21Shares’ crypto winter suite
Rashwan added that the launch would be the first installment of 21Shares’ “crypto winter suite,” to help investors weather the stormy markets. The risk-adjusted crypto ETPs will similarly offer some downside protection in return for surrendering some potential gains, “so the investor can have more confidence investing at this point,” he said.
The products are likely to cover bitcoin, ether and potentially some broader crypto indices.
The price of Bitcoin has slumped roughly 70% from its peak last Nov. From the zenith, total market capitalization of cryptocurrencies has fallen from $3.2 trillion to under $1 trillion.
Following its recent liquidation and bankruptcy, Singapore-based crypto hedge fund manager Three Arrows Capital became the latest firm swept under the current of the raging tide.
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