Deutsche Digital Assets has launched what it describes as the world’s first bitcoin ETP dynamically optimising bitcoin exposure based on macroeconomic factors. The ETP is now listed on Deutsche Börse’s Xetra.
DDA Bitcoin Macro ETP is 100 per cent physically backed by a basket of cryptocurrencies composing the Compass FT DDA Bitcoin Macro Allocation Index and is held in “cold storage” at a regulated custodian.
The firm writes that the DDA Bitcoin Macro ETP provides a dynamic, systematic exposure to BTC and USDC, utilising key macroeconomic factors to optimise its bitcoin exposure and enhance long-term risk management, at a total expense ratio of 2.00 per cent.
Additionally, any further income generated by the underlying will be accumulated to the ETP to increase the coin entitlement. Also, due to the recent update by the German Federal Ministry of Finance (BMF) on the treatment of virtual currencies and other tokens under German Income Tax Law, German private investors could benefit from tax advantages due to the physical redemption option embedded, rendering capital gains tax free after a 365-days holding period.
“We are excited to announce the listing of DDA Bitcoin Macro ETP, our first smart beta crypto ETP. The Bitcoin Macro ETP represents a truly unique product that is not simply another cryptocurrency wrapped into an ETP but gives investors the upside of bitcoin while trying to protect against adverse macro environments,” says Dominik Poiger, CFA, Chief Product Officer of DDA.
“The volatility and drawdowns associated with investing in cryptocurrencies scare many retail and institutional investors. We want to offer a range of smart beta strategies enabling them to gain exposure to cryptocurrencies while managing their risk more efficiently over the long term. The first one launched by DDA reduces its exposure when the biggest macroeconomic factors weigh negatively on the bitcoin price,” says Marc des Ligneris, in charge of quantitative strategies at DDA.
