Meet CoinShares crypto ETPs

What are physical crypto ETPs?

The objective of an ETP is to replicate the performance of an underlying asset or benchmark with maximum efficiency and precision. Physical crypto ETPs achieve this by purchasing the actual asset they are designed to track. 

For more information on crypto ETPs, head over to our companion article  What are crypto ETPs.

As crypto is a digitally-native asset, the term “physical” may seem out of place. However, while it is true that assets like Bitcoin or Ethereum are digital in nature, they still need to be safeguarded from hacking or loss. Some crypto investors choose to self-custody their assets, by storing them long-term in cold wallets (pieces of hardware that are disconnected from the internet). Others leave them in exchanges’ custody, essentially trusting the exchange with their assets - which can sometimes have disastrous consequences. You can learn more about the risks exchanges carry in our article ETPs vs Exchanges.

When it comes to crypto, ETPs provide investors with another alternative: get exposure to crypto through a regulated product, without having to worry about custody, or trusting a crypto exchange.

CoinShares is Europe’s largest and leading crypto exchange-traded products (ETPs) provider, delivering innovative products and services since 2014. In this article, we will focus on the full range of CoinShares’ ETPs, explaining what they are, the key benefits they offer to investors, and how CoinShares delivers its physical ETP range through two distinct platforms: CoinShares Digital Securities (CSDS) and CoinShares XBT Provider.

CoinShares Crypto ETPs

CoinShares Crypto ETPs platform consists of 22 ETPs, all covering a broad range of exposures within the digital asset market.

CoinShares delivers its physical ETP offering through two distinct platforms: CoinShares Digital Securities, which is broadly available to European investors, denominated in several major currencies and listed on key European exchanges. CoinShares XBT Provider offers ETPs specifically designed for Swedish investors, denominated in SEK and listed locally on Nasdaq Stockholm.

ETPs are designed to replicate the return of an underlying benchmark or asset, either physically or synthetically. Synthetic ETPs use swap agreements with a counterparty, usually a bank, to provide the return of the underlying assets - they are generally considered more complex to maintain for most assets and less safe. CoinShares crypto ETPs are “physical”, meaning they physically buy and hold the underlying assets they track. 

Custody

Assets are securely held with Komainu, a specialised digital asset custodian regulated by the Jersey Financial Services Commission (JFSC). Founded in 2018, Komainu was built to meet the specific requirements of institutional investors, building on industry leading digital asset security technology, and supported by risk and compliance standards developed alongside a global investment bank.

Komainu’s market-leading hardware security modules (HSMs) and cryptographic security protocols provide an institutional-grade custody solution, while still allowing for the flexibility required in 24/7 digital asset markets. 

Zodia, a UK-based institutional digital asset custodian who offers secure and compliant custody solutions for cryptoassets, has also been introduced as a custodian for CoinShares XBT Provider ETPs. CoinShares XBT Provider ETPs benefit from having a second custodian in an aim to reduce risk and provide greater security for investors' assets.

Limited recourse

Unlike some competing physical Crypto ETPs, CoinShares crypto ETPs do not allow commingling of assets between products, ensuring investors' exposure is limited to the asset underlying the ETP.

Bankruptcy remote

CoinShares crypto ETPs are structured to be bankruptcy remote, which means the assets backing the ETP are ring-fenced, and investors’ interests are protected in the unlikely event of counterparty default. Ultimately there is no credit risk associated with physical ETPs - only the price risk of underlying asset(s) being tracked. 

Fully fungible

If you decide you want to take personal responsibility for securely holding and storing your digital assets, it is possible to redeem CoinShares crypto ETPs directly for physical cryptocurrency (subject to terms of redemption).

Competitive and transparent management fees

CoinShares' ETPs have some of the lowest management fees on the market - even reduced to 0% on some products - making investing in crypto accessible to everyone through their preferred investment platform. This allows investors to be exposed to crypto with no hidden costs hampering their performance. 

A listed company, for increased trust

CoinShares International Ltd is listed on Nasdaq Stockholm. All its products and services follow strict accounting and security standards, regularly audited by national regulators. This is in stark contrast with private companies that are not subject to these rules and hence less transparent with investors. In addition, CoinShares’ dedicated Compliance Team ensures best-in-class compliance with applicable regulations and practices in an ever-evolving market.

CoinShares ETPs cover a broad range of asset and are widely available across Europe:

As easy as XYZ

CoinShares crypto ETPs are available through your regular broker or investment platform. And once you have bought them, you can trade them as easily as stocks and shares.

Choosing is the hardest part

CoinShares offers crypto ETPs that track a long list of digital assets. You can also choose from different types of ETPs, in order to focus on a single asset, benefit from staking, or invest in a diversified index. Head over to our ETP catalogue for the full product list. 

How to invest in CoinShares' crypto ETPs

Coinshares currently provides 22 crypto ETPs in total, across the Coinshares Digital Securities and XBT Provider ranges, tracking Bitcoin, BNB, Ethereum, Cosmos, Polkadot, Polygon, Cardano, Algorand, Solana, Tezos, Toncoin, Uniswap, Chainlink, Litecoin, Sei and XRP. Once you have decided which ETPs you wish to invest in, the process is quite straightforward.

1. Log in to your your broker’s website or application to buy your ETP

The exact process then depends on your broker, but it should be the same as for any security you already own:

• Select your CoinShares’ crypto ETPs on your broker account

• Choose the notional amount or number of securities you wish to buy and place the execution order 

• Place your order 

2. And… that’s it!

All you have to do is monitor your ETP’s performance. And as it’s integrated into your portfolio, a quick look at your dashboard is enough. CoinShares also shares reports for its ETPs, providing expert insights into products and market trends. 

Conclusion

CoinShares crypto ETPs are 100% physically backed, accurately reflecting value, while being securely stored by our regulated custodian following industry standards. But that does not come at the expense of accessibility. Investing in a CoinShares ETP only takes a few minutes through your preferred broker, and you are then free to trade it on a securities exchange.

Crypto ETPs therefore offer the best of both worlds: they are as easy to use as they are safe. 

Ready to add them to your portfolio? Browse our Crypto ETP catalogue for more information. 

Download our detailed product list