In Focus: Megatrends  

Fifth of UK investors never heard of ETFs

 

Wisdom Tree said platforms should do more to provide access to ETPs.

It found 36 per cent of UK retail investors got their investment research and information from their investment platform or broker, 35 per cent from a financial adviser and 33 per cent from financial news sites.

New crypto ETPs

Wisdom Tree itself has recently added three physically-backed cryptocurrency ETPs to its European range of funds. But these too are currently only available to institutional investors due to regulatory restrictions.

Wisdom Tree has launched Solana, Cardano and Polkadot ETPs (Credit: Gabby Jones/Bloomberg)

Crypto ETPs offer customers exposure to crypto assets by tracking the underlying price of the currencies without requiring investors to hold the assets themselves.

The Solana, Cardano and Polkadot ETPs have been listed on the Swiss Stock Exchanges SIX and Börse Xetra, and on Euronext exchanges in Amsterdam and Paris from March 31.

ETPs are flourishing in Europe but in the US the Securities and Exchange Commission is still preventing spot ETFs from launching.

In contrast, investors seeking crypto exposure are left with futures ETFs "which incur roll costs and trusts that trade away from their underlying value", according to a Bloomberg Intelligence report out earlier this month.

BI predicted if regulatory approval allowed for the launch of a spot Bitcoin ETF by the end of 2023, this would spark "tens of billions in assets added to crypto funds" and push crypto assets into the mainstream.

Expanding crypto universe

Alexis Marinof, head of Europe at WisdomTree, said: "Interesting and different use cases for the likes of Solana, Cardano 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.”

Created in 2017, Solana is a smart contract platform for decentralised applications similar to Ethereum, but promises to be cheaper than its rival.

Alongside a proof of stake model it features a timestamp system called proof of history that enables automatically ordered transactions.

Solana has gained popularity in relation to social networks, blockchain gaming, and decentralised exchanges.

Similarly, Cardano was created in 2015 as a smart contract platform alternative to Ethereum.

Cardano is used in areas such as education credential verification, retail product counterfeiting and in finance for Know Your Customer and Anti-Money Laundering checks.

Polkadot was created in 2016 with a focus on connecting various blockchains for transferring data or assets. It is used for things like decentralised exchanges, data processors and bridging solutions.

carmen.reichman@ft.com