German crypto manager Deutsche Digital Assets has launched a new physically backed Bitcoin ETP which dynamically adjusts its exposure based on prevailing macroeconomic conditions.
The ETP offers a risk-managed approach to Bitcoin investing based on macroeconomic signals.
The DDA Bitcoin Macro ETP (BMAC FP) has been listed on Euronext Paris and Xetra with an expense ratio of 2.00%.
The ETP tracks the Compass FT DDA Bitcoin Macro Allocation Index, offering a systematic and adaptive approach to Bitcoin investment.
The index employs a quantitative model that generates an investment signal based on four key macroeconomic factors, each represented by baskets of assets most sensitive to those factors.
The model derives a momentum score for each factor, which is then used to produce individual sub-signals. These sub-signals are weighted according to their explanatory power on Bitcoin’s price movements over a 6-month rolling window, culminating in a final, comprehensive investment signal.
Based on this final signal, the index dynamically shifts its exposure between Bitcoin and USD Coin, a stablecoin pegged to the US dollar and backed by dollar-denominated assets held in segregated accounts with US-regulated financial institutions. In risk-on macroeconomic environments, the strategy increases its allocation to Bitcoin, while in risk-off conditions, it tilts more heavily toward USD Coin to preserve capital.
This allocation strategy may be particularly appealing to investors who are wary of the high volatility typically associated with Bitcoin and other cryptocurrencies, offering a means to balance the high returns associated with Bitcoin with the need for risk management.
Each ETP share is 100% collateralized by a corresponding investment in Bitcoin and US Dollar Coin which are held in an institutional-grade ‘cold storage’ custody solution provided by Coinbase Custody International.
Dominik Poiger, Chief Product Officer of Deutsche Digital Assets, commented: “The Bitcoin Macro ETP represents a truly unique product that is not simply another cryptocurrency wrapped into an ETP but gives investors exposure to Bitcoin while trying to protect against adverse macro environments.”