Markets

Galaxy and DWS collaborate on European cryptocurrency ETPs

Galaxy Digital Holdings and DWS have formed a strategic alliance to launch new crypto products that will be traded via exchanges in Europe.

the advertisement He mentioned that the pair will “explore other digital asset solutions.” DWS will also be Galaxy’s exclusive partner for exchange-traded products (ETPs) in the European market. Access to the new securities will be via traditional brokerage accounts.

ETP concept

Steve Kors, Global Head of Asset Management at Galaxy, emphasized collaboration with DWS as key to the success of the new product.

The partners’ goal, Kurtz said, is to “enhance our ability to offer comprehensive solutions to European investors, enabling them to benefit from the huge potential and promise of blockchain technology and digital assets in a safe and convenient way.”

ETPs are securities that track the value of an underlying asset, index or financial instrument. ETP values ​​are, in theory, based on the assets they track, making them a cheaper alternative to mutual funds. But US regulators cautioned that the values ​​are not necessarily compatible with market volatility.

The new Galaxy and DWS ETPs will be based on digital assets such as Bitcoin, Ethereum, and NFTs. Allowing investors to track a variety of assets in a single security.

Why is it important

New digital asset ETPs carry significant risks. However, they appeal to some investors for several reasons. First, they allow diversification of portfolios by providing exposure to a wide range of assets. Including cryptocurrencies, stocks, bonds and commodities.

Secondly, ETPs are easily accessible to retail and institutional investors as they trade on exchanges. This means that investors can invest in different assets without having direct ownership or dealing with complex trading platforms.

In addition, ETP is highly liquid, resulting in tight bid-ask spreads and lower transaction costs. They also tend to have lower fees and operating expenses, resulting in savings for investors. Finally, ETPs are transparent and disclose their holdings daily, which helps investors make informed decisions about their investments.

For all the perceived benefits, the risks are real. The Commodity Futures Trading Commission (CTFC) issued a warning About ETPs. He cautions that they don’t necessarily behave like traditional exchange-traded funds or mutual funds that invest in stocks, bonds, or other asset classes. The CFTC indicates that there are potentially severe discrepancies between the value of the stock of the commodity group, and the values ​​to which the underlying asset or assets may rise or fall.

The CTFC cautions traders against holding onto any unjustified hopes about the long-term profitability of ETPs.

Disclaimer

Adhering to the Trust Project’s guidelines, BeInCrypto is committed to providing unbiased and transparent reporting. This news article aims to provide accurate and timely information. However, readers are advised to independently check the facts and consult with a professional before making any decisions based on this content.

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