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ETP based on Binance Tokens, Libra tales & Grayscale’s next index

For a large segment of investors that do not yet own crypto, and does not want to bother with crypto exchanges, but wants exposure to the asset class, ETPs and ETFs are a great way to cheaply access crypto. However, traditional exchanges around the world have been slow to warm up to products that track crypto. Except for a select few like the SIX exchange in Switzerland.

Binance’s native cryptocurrency will serve as the underlying asset to a new exchange traded product (ETP). The world’s largest crypto exchange by trading volume said Wednesday it has partnered with fintech firm Amun to develop the USD-denominated ETP.

Listed on Switzerland’s principal stock exchange SIX under the ticker ABNB, the financial product can be purchased through a bank or a brokerage like a stock. The ETP will initially be backed by $20 million worth of Binance coins (BNB), representing nearly a quarter of the firm’s total crypto assets under management.

Amun had already partnered with Bitcoin Suisse to launch ETPs for Bitcoin, Ethereum and XRP. Despite the regulatory concerns around Binance, it is interesting to see a traditional finance product being created for BNB tokens. It is perhaps the strong outperformance of centralized exchange tokens YTD that caused this segment of utility tokens to gain traction. One thing to note though – Especially given that the fascination for IEOs also seems to be on the wane now, BNB is definitely heading down from its peak earlier this year. Could this be a case of retail rushing in after the party is over?

Libra’s response

After a spate of key departures, Libra’s remaining partners met yesterday to chalk out the roadmap for the project and formalize the governance structure of the council. With Naspers’-backed PayU the only remaining payments-focused company in the consortium, several questions about the future success of the project were raised. Perhaps to appease the growing skepticism, Libra announced yesterday that it has received interest from as many as 1500 global organizations around the world, out of which 180 meet the eligibility criteria to hold a seat on Libra’s council. 

Surprisingly, the association did not make any changes to its strategy or roadmap that could potentially help Libra assuage some of the regulators’ concerns around financial and economic risks posed by the project. However, Chris Dixon’s idea of pegging Libra to the US dollar will alleviate some of the perceived threats expressed by regulators to the USD hegemony is an interesting proposition.  

Grayscale’s Index Fund

Digital Currency Group’s Grayscale Investments, the biggest digital asset manager with over $2B in AUM, received approval from FINRA to list the first publicly-quoted crypto index fund (DLC) on OTC markets. The investment product is available to accredited investors only and joins Grayscale’s Bitcoin trust, Ethereum trust and Ethereum Classic trust to become the fourth product to be listed on public markets. 

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