With 3 new crypto ETPs to be launched in Europe, can U.S. afford to stay behind
In the past week, digital asset investment products witnessed the most significant inflows so far this year at $193 million. Interestingly, Europe saw a majority of the flow, in this case, some 76% of total inflows at $147 million.
Diversifying my roots
WisdomTree, a New York-based exchange-traded fund (ETF) asset management firm, announced the launch of three new cryptos ETPs this week. It would track the performance of Solana (SOL), Cardano (ADA), and Polkadot (DOT).
The new ETPs dubbed WisdomTree Solana (SOLW), WisdomTree Cardano (ADAW), and WisdomTree Polkadot (DOTW) would give investors exposure to the prices of the underlying crypto assets. In that context, SOLW, ADAW, and DOTW had a total expense ratio of 0.95% or carried an expense ratio of 95 basis points.
In addition, the pan-European exchange Euronext expected to record the crypto ETPs in Amsterdam and Paris on 7 April, the announcement noted.
The firm also added that investors can access the three digital assets through its diversified crypto basket ETPs – WisdomTree Crypto Market (BLOC) and WisdomTree Crypto Altcoins (WALT) and are available for sale in Austria, Belgium, Denmark, Finland, France, Germany, Italy, Ireland, Luxembourg, Netherlands, Norway, Poland, Spain, Sweden, and Switzerland.
Here comes the fee war?
According to Eric Balchunas, Bloomberg’s senior ETF analyst, the offering is poised to severely undercut Switzerland-based crypto ETP issuer 21Shares, which charged its investors a 2.5% management fee.
WisdomTree launching Solana, Cardano and Polkadot ETPs in Europe fee of 0.95%, severely undercutting similar products from 21Shares' which charge 2.5%. So let me get this straight: they're already in a fee war over Polkadot ETPs in Europe AND STILL NO (you know the rest) pic.twitter.com/pIvMPJDjXZ
— Eric Balchunas (@EricBalchunas) March 31, 2022
Indeed, other altcoins did get attention across the globe. Earlier this month, Bloomberg reported that CoinShares had joined forces with crypto exchange FTX in order to launch a Solana-based ETP.
But where’s the result?
While there is already stiff competition among ETP issuers, the U.S. doesn’t have a physically-backed Bitcoin exchange-traded fund. If this continues, the US could miss out on the ETF opportunity while others would capitalize on it.