VanEck launches trio of new crypto ETPs

Apr 9th, 2022 | By | Category: Alternatives / Multi-Asset

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VanEck has unveiled three new crypto asset ETPs in Europe providing directly backed exposure to ALGO, LUNA, and FTT, the native tokens underpinning the Algorand, Terra, and FTX networks, respectively.

VanEck launches trio of new crypto ETPs

VanEck now offers ten crypto asset ETPs in Europe.

The VanEck Algorand ETN (VGND GY), VanEck Terra ETN (VLNA GY), and VanEck FTX ETN (VFTX GY) have been listed on Deutsche Börse Xetra in euros.

The ETPs provide institutional investors with easy access to the underlying digital assets through liquid, regulated vehicles without the technical challenges of setting up private keys or crypto wallets.

VGND, VLNA, and VFTX are 100% “physically” backed by ALGO, LUNA, and FTT, respectively, providing direct exposure to the underlying cryptocurrencies with the added oversight, security, and liquidity inherent in the ETP structure.

The ETPs’ crypto holdings are kept in institutional-grade “cold storage” by Bank Frick, a Liechtenstein-based institution specializing in crossover finance.

Each ETP comes with an expense ratio of 1.50%.

The new listings extend VanEck’s European crypto asset suite to ten products with the other ETPs offering directly backed exposure to Bitcoin, Ethereum, Solana, Tron, Polkadot, Polygon, and Avalanche.

According to VanEck, crypto assets selected as the basis for the firm’s ETPs were chosen as they scored favourably on multiple criteria including market capitalization, functionality, number of transactions, exchange availability, track record, and development team.

Algorand

Algorand is a Layer 1 blockchain solution that supports the creation of decentralized applications.

Algorand was founded by Silvio Micali, an MIT Professor and recipient of the Turing Award in computer science which is often referred to as the Nobel Prize in computing.

With Algorand, Micali has developed a novel ‘pure’ proof-of-stake consensus mechanism which he argues helps to solve one of the most persistent problems facing cryptocurrencies: scalability.

With a total market capitalization of $5.2bn, ALGO is currently ranked as the 30th-largest cryptocurrency globally.

Terra

The Terra blockchain, which is capable of processing a transaction in just two seconds and up to 10,000 transactions per second, underpins an extensive decentralized finance (DeFi) ecosystem based on the issuance of algorithmically managed stablecoins.

Stablecoins are cryptocurrencies that are pegged to reserve assets such as major fiat currencies. They are commonly used in DeFi applications as they enable investors to generate yield on their crypto assets while alleviating the potential adverse effects of market volatility.

Terra’s aim is to disrupt traditional finance by satisfying all of an individual’s banking needs in one place.

LUNA serves two primary functions on the Terra blockchain, verifying transactions and regulating Terra’s stablecoin pegs through an arbitrage mechanism.

With a market capitalization of $35.3bn, LUNA is currently the ninth-largest cryptocurrency globally.

FTX

FTX is a leading crypto derivatives exchange offering futures, options, volatility products, and leveraged tokens. It is the third-biggest token exchange with a daily trading volume in excess of $2.5 billion.

FTT is an ethereum-compatible token that forms the backbone of the FTX ecosystem, allowing users to post collateral against their derivative positions. It also enables staking, trading fee discounts, and participation in community governance voting.

With a total market capitalization of $6.2bn, FTT is currently the 27th-largest cryptocurrency globally.

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