Deutsche Digital Assets Launches Macro-Adjusted Bitcoin ETP on Euronext

Deutsche Digital Assets (DDA), a German crypto asset manager, has expanded its Bitcoin exchange-traded product (ETP) offerings by listing its DDA Bitcoin Macro ETP on Euronext Paris.

This marks the second exchange for the ETP, following its initial launch on Xetra , the electronic trading platform of Deutsche Börse

According to the company’s announcement from Sept. 17 , the DDA Bitcoin Macro ETP (BMAC) is fully physically backed by a basket of cryptocurrencies that make up the Compass FT DDA Bitcoin Macro Allocation Index (DDAMACRO). The ETP is held in secure cold storage custody at Coinbase Custody International Ltd., a regulated custodian.

The ETP has a total expense ratio (TER) of 2%.

🔔 𝗗𝗗𝗔 𝗟𝗶𝘀𝘁𝘀 𝗪𝗼𝗿𝗹𝗱'𝘀 𝗙𝗶𝗿𝘀𝘁 𝗕𝗶𝘁𝗰𝗼𝗶𝗻 𝗠𝗮𝗰𝗿𝗼 𝗘𝗧𝗣 𝗼𝗻 𝗘𝘂𝗿𝗼𝗻𝗲𝘅𝘁 𝗣𝗮𝗿𝗶𝘀 🔔

The revolutionary DDA Bitcoin Macro ETP is now listed and starts trading on @Euronext Paris on 17 September 2024. BMAC provides investors with a dynamic, systematic… pic.twitter.com/GGPRp5GwYb

— Deutsche Digital Assets (@DDA_GmbH) September 17, 2024

Expanding Crypto Investment Options

“With the listing on Euronext Paris investors from France can now invest even more economically and easily in the only macro ETP on Bitcoin,” said Dominik Poiger, Chief Product Officer of DDA. He added:

“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.”

The launch of BMAC on Euronext Paris complements DDA’s existing suite of crypto ETPs available on various European exchanges. These include DDA Physical Bitcoin ETP (XBTI), DDA Physical Ethereum ETP (IETH) and DDA Crypto Select 10 ETP (SLCT).

Dynamic Exposure to Bitcoin and USD Coin

The DDA Bitcoin Macro ETP tracks the Compass FT DDA Bitcoin Macro Allocation Index , which employs a quantitative model to assess real-time macroeconomic factors and determine the optimal allocation between Bitcoin ( BTC ) and US Dollar Coin ( USDC ), a stablecoin pegged to the U.S. dollar.

The index’s quantitative model analyzes four key macroeconomic factors:

• Global Growth: This factor is linked to assets sensitive to global economic growth, such as U.S. cyclical equities and high-yield bonds.
• Monetary Policy: This factor is associated with assets that are affected by U.S. monetary policy changes, like emerging market sovereign bonds and gold.
• U.S. Dollar: This factor is related to exchange rates involving the U.S. dollar.
• Eurozone Risk: This factor is connected to assets that may be impacted by risks associated with the European Monetary Union, such as Italian sovereign spreads and the CHF/GBP exchange rate.

Each factor is represented by a basket of assets that are most sensitive to that particular factor.

The model calculates a momentum score for each factor, which is then used to generate individual sub-signals. These sub-signals are weighted based on their explanatory power for Bitcoin price movements over a 6-month rolling window, culminating in a final investment signal.

In risk-on macroeconomic environments , the strategy will increase its allocation to Bitcoin, while in risk-off conditions, it will tilt more 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, as it provides a means to balance the high returns associated with Bitcoin with the need to manage risk.

A Surge in European Crypto ETPs

While the U.S. market was making headlines with its spot Bitcoin and Ether exchange-traded funds ( ETFs ) approvals, Europe has long been a pioneer in the crypto ETP space. Numerous asset managers like 21Shares , WisdomTree, ETC Group , Valour and Fidelity have successfully listed various cryptocurrency ETPs over the years, providing investors with exposure to Bitcoin, Ether ( ETH ), and other digital assets.

As of June 28, Europe’s crypto ETP market had a total asset under management (AUM) of approximately $12 billion, according to Trackinsight . However, despite this substantial figure, it’s worth noting that North America remains the dominant market for crypto ETPs.