Crypto: BofA offers Bitcoin futures, launches ETP clearing/settlement

Due to the requirement of a large amount of margin for trading the futures, only some wealthy clients of the bank have been allowed to access the cryptocurrency market. These clients have started to trade bitcoin futures, which are essentially fiat currency settled (which means cash-settled).

The bank’s prime brokerage unit is also offering clearing and settlement of cryptocurrency exchange-traded products (ETPs) for hedge funds in Europe, according to media reports.

BofA has become the latest US bank to make a foray into the digital assets market. Earlier this month, the US bank announced the launch of a team dedicated to researching cryptocurrencies on the basis that it believes it is ‘uniquely positioned to provide thought leadership on cryptocurrencies and the technology behind them’.

The new crypto team will be led by Alkesh Shah, a founding member of the Data & Innovation Strategy Group at BofA. Shah has been appointed global crypto and digital asset strategist and will report to Michael Maras, who leads the bank’s global fixed income, currencies, and commodities research. The new team will also cover technologies linked to digital currencies.

A growing number of investment banks have begun offering or are in the process of offering cryptocurrency services to their clients including Goldman Sachs, Morgan Stanley, Citigroup, Standard Chartered, Wells Fargo, BBVA and DBS.

New proxy index to track equities that perform like BTC

Paris-based investment management company Melanion Capital has partnered with index platform Bita to launch the Melanion Bitcoin Exposure Index, a gauge that tracks an equities basket with the highest correlation and revenue exposure to bitcoin.

The index tracks a beta-weighted equities basket exhibiting the highest correlation and revenue exposure to bitcoin to follow the biggest cryptocurrency’s performance in a traditional investment fund format.

Melanion Bitcoin Exposure Index is built to provide investors ‘with exposure to the daily price movements of Bitcoin through a diversified basket of equities that meets traditional investment fund standards,’ said the firm. The index would enable banks and asset managers to offer Bitcoin exposure to their clients in various wrappers such as investment funds, exchange-traded funds, certificates or structured products in a European regulatory compliant format.

Using Europe and North America-based companies that operate or invest in the crypto space as a basis, the index is comprised of the 30 companies that are most correlated to Bitcoin, with their weights allocated accordingly. Liquidity filters and weight caps are applied to guarantee the stability and scalability of the Index.

InCore Bank launches AMC solution for crypto investment products

InCore Bank’s new crypto asset solution, established with GenTwo Digital, allows asset managers and banks for the first time to easily tailor innovative investment products in crypto currencies under their own name.

InCore Bank, a Swiss B2B banking service provider, has announced the launch of a ‘comprehensive crypto asset solution’.

The solution named CRYSP was set up in cooperation with securitisation platform provider GenTwo Digital, and is targeted at asset managers, whether they are from a bank or external, to build bankable products based on crypto currencies, and then offer them to their clients in the form of actively managed certificates (AMC) without having to deal with the entire set-up.

As a pure transaction bank, InCore Bank will be responsible for the entire technical and regulatory implementation of the strategies and the issuance and settlement of the corresponding certificates for its clients. GenTwo Digital provides the securitisation platform and calculates the value of the certificates.

In parallel, the Zurich-based transaction bank acts as paying agent - the execution of trades and the custody of the assets will be done through Kraken’s platform which offers more than 70 different assets and trading in seven different fiat currencies.

21Shares, Comdirect in exclusive crypto partnership for savings plan

Pioneer crypto exchange-traded products (ETPs) provider 21Shares and German online financial portal, Comdirect have launched an exclusive partnership to bring crypto ETPs into savings accounts.

Under the terms of the partnership, the Swiss ETP issuer will remain as the sole provider of physically-backed crypto ETPs to the online broker’s savings plan programme (Spar plan). Eleven of 21Shares’s ETP offerings currently listed in Germany are available on the Comdirect platform at zero commissions.

The partnership marks a first for investors opting to add crypto assets into their savings accounts - Comdirect provides financial products and services more than 2.9m customers (Sept 2020).

‘This is very exciting for any investors who have been thinking about purchasing bitcoin but did not offer the proper investment tools to store them successfully in a savings plan. This partnership now makes it possible - another milestone in democratisation crypto investments,’ said Marco Infuso, managing director business development of the DACH region at 21Shares.

21Shares was the first crypto issuer to list a fully collateralised, 100% physically-backed bitcoin ETP on most German exchanges back in 2019, and is also the only issuer to have four crypto ETPs listed on Xetra.

Deutsche Börse adds CoinShares as new issuer of crypto ETNs

Cryptocurrency product provider CoinShares has launched three crypto exchange traded notes (ETNs) with physical collateralisation on Bitcoin (GB00BLD4ZL17), Ethereum (GB00BLD4ZM24) and Litecoin (GB00BLD4ZP54) on Xetra and Börse Frankfurt.

The three ETNs from CoinShares give investors access to the performance of the digital currencies Bitcoin, Ethereum and Litecoin without having to set up crypto wallets. All three products are physically backed by the respective cryptocurrency and centrally cleared which reduces the risk in the settlement of their transactions.

In June last year, Deutsche Börse became the first exchange worldwide to launch trading in centrally cleared crypto products. Investors can now choose from 15 ETNs from six providers on Bitcoin, Bitcoin Cash, Ethereum and Litecoin.

With an average monthly order book turnover of around €1 billion, Deutsche Börse’s Xetra market is the European market leader in crypto ETN trading. The product offering in Deutsche Börse's ETF & ETP segment currently comprises a total of 1,651 ETFs and 210 ETCs and ETNs. With this selection and an average monthly trading volume of around €17.5 billion, Xetra is the leading trading venue for ETFs and ETPs in Europe.