WisdomTree has added a trio of directly backed altcoin ETPs to its digital assets suite in Europe.
Jason Guthrie, Head of Digital Assets, Europe, WisdomTree.
The new listings provide exposure to ADA, SOL, and MATIC, the native tokens underpinning the Solana, Cardano, and Polkadot networks, respectively.
The WisdomTree Cardano ETP (ADAW), WisdomTree Solana ETP (SOLW), and WisdomTree Polkadot ETP (DOTW) have been listed on SIX Swiss Exchange in US dollars and Swiss francs, on Euronext Amsterdam in US dollars, and on Euronext Paris and Deutsche Börse Xetra in euros.
The ETPs enable investors to access popular altcoins without the need to hold them directly, store private access keys, or interact with the blockchain or digital currency infrastructure in any way.
They use full direct, so-called ‘physical’ replication with each ETP share being 100% collateralized by a corresponding investment in ADA, SOL, or MATIC. Investors in the ETPs benefit from institutional-grade cold storage solutions without the need to personally set up the arrangement with a custodian.
According to WisdomTree, the ETPs also offer the potential to deliver ‘staking’ rewards to investors. Staking is a way of earning income for holding certain cryptocurrencies that work on a proof-of-stake consensus mechanism. Proof-of-stake mechanisms put their underlying cryptocurrency to work in verifying and securing transactions on the blockchain. Investors who choose to take part in this process ‘stake’ their cryptocurrency holdings and earn rewards for doing so.
Each ETP comes with an expense ratio of 0.95%,
WisdomTree now offers eight directly backed crypto asset ETPs in Europe. Aside from the current listings, the suite also comprises Bitcoin and Ethereum products as well as three ETPs, launched in December 2021, providing exposure to mega-cap, broad market, and altcoin baskets of cryptocurrencies.
Jason Guthrie, Head of Digital Assets, Europe, WisdomTree, said: “We want to provide investors with a range of crypto asset exposures, whether that be through diversified baskets or single trackers. A key component of our approach is launching strategies that will resonate with institutional investors. These need to be crypto assets that are liquid enough for institutional use, are supported by ETP market participants, and have clear use cases. As the crypto asset market evolves, so too will the ETP ecosystem which is needed for more institutional adoption. We will continue to enhance and expand our product range, supporting investors on their journey into crypto assets”.
Alexis Marinof, Head of Europe, WisdomTree, added: “Digital assets are an exciting and growing asset class which is continuing to capture the imagination of investors. Interesting and different use cases for the likes of Cardano, Solana, and Polkadot represent the next stage of evolution for this young asset class. While Bitcoin and Ethereum grab the headlines, altcoins are now viable options for many institutional investors, providing more options to diversify their crypto holdings just like they would with any other asset class.”
Cardano
Cardano, developed by Ethereum co-founder Charles Hoskinson, is a smart contract platform enabling developers to build decentralized applications.
Unlike other leading smart contract platforms such as Ethereum, Cardano powers its transaction settlement using a proof-of-stake algorithm, a structure considered less risky in terms of the potential for miners to attack the network.
With a total market capitalization of $38.2 billion, ADA is currently ranked as the eighth-largest cryptocurrency globally.
Solana
Solana, launched in March 2020, is a highly functional open-source project providing decentralized finance solutions.
Solana’s main innovation is its proof-of-history consensus which leads to incredibly short validation times of less than half a second (compared to 15 seconds for Ethereum and around 10 minutes for Bitcoin) and allows the blockchain to handle thousands of transactions per second.
The protocol is designed in such a way as to have low transaction costs while still guaranteeing speed and scalability.
Due to its lightning-fast validation times, Solana has attracted a lot of institutional interest, and SOL is currently the sixth-largest cryptocurrency globally with a total market capitalization of $40.2bn.
Polkadot
Polkadot is a blockchain of blockchains, allowing otherwise independent blockchains to communicate with each other, share security features, and transfer assets freely amongst themselves.
The DOT token serves two vital roles in the system – it is designed to participate in governance decisions, including tabling proposals and voting, and it is used as an electronic payment system.
With a current market capitalization of $21.0bn, DOT is the eleventh-largest cryptocurrency globally.