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  • Cryptocurrency ETC/ETN for portfolio diversification already available at Freedom24
Max Manturov

Max Manturov

Head of investment research regulated by CySec 21.02.2022

Cryptocurrency ETC/ETN for portfolio diversification already available at Freedom24

Those who want to invest in cryptocurrency do not need to open an account with a cryptocurrency exchange. And there is no need to create a separate crypto wallet for this either, as in 2021 large funds actively started organising Exchange-Traded Products reflecting the dynamics of the underlying crypto asset. Trading these instruments is now also possible through the Freedom24 trading platform.

Our analysts recommend paying attention to the following Crypto ETNs* and ETNs**:

1) ETC Group Physical Bitcoin (BTCE.EU)

ETC Group Physical Bitcoin tracks Bitcoin quotes. This ETC is 100% backed by the relevant cryptocurrency and is traded on the Deutsche Börse XETRA and SIX Swiss Exchange, providing investors with one of the safest and most liquid ways to access Bitcoin. Each BTCE unit entitles the holder to claim a predetermined number of Bitcoins. Investing in Bitcoin through a BTCE instrument is as easy as buying shares through a broker or bank. Unlike investing directly in cryptocurrency, there are no technical issues involved in setting up a cryptocurrency wallet to store the asset. BTCE is traded on regulated European exchanges such as Xetra, Euronext and SIX. Investors can be assured that all market participants are strictly vetted and closely monitored, which prevents market abuse, unlike cryptocurrency exchanges, many of which are unregulated.

The type of ETP is ETC.

Current price - € 32,5

AUM - $711.6 million

Cost ratio - 2%

Assets: Bitcoin


2) ETC Group Physical Ethereum (ZETH.EU)

ETC Group Physical Ethereum tracks quotations for Ether, the Ethereum network's own cryptocurrency. The main exchange on which ZETH is traded is Deutsche Börse XETRA. ETC provides investors with secure access to Ether. Each unit of ZETH is 100% backed by the corresponding cryptocurrency and entitles the owner to claim a predetermined amount of coins. As with BTCE, investors don't have to worry about their assets - each market participant is thoroughly vetted. 

Type of ETP - ETC

Current price - €23,2

Currency - EUR

Expense Ratio - 1.49%

Assets: Ether


3) VanEck Vectors Bitcoin ETN (VBTC.EU)

VanEck Vectors Bitcoin ETN is a fully collateralised exchange-traded note that is linked to Bitcoin and has the following features:

  • direct access to the largest and most liquid cryptocurrency, Bitcoin
  • 100% bitcoin-backed and held in cold storage by a regulated cryptocurrency custodian with crypto-insurance (limited in amount)
  • traded as an ETF on Deutsche Börse Xetra     

ETP type - ETN

Current price - €18,5

AUM - $202.1 million

Currency - EUR

Expense Ratio - 1%

Assets: Bitcoin

KID - kid_vaneck-vectors-bitcoin-etn-DE000A28M8D0-nl.pdf

*ETCs (exchange-traded commodity) are securities that can offer traders and investors, without direct exposure to spot or commodity markets, access to commodities such as metals, energy, livestock, etc. ETCs track both individual commodities and a basket of several commodities, and provide an alternative to trading commodities in a futures market.

ETCs differ from ETFs in that they are debt instruments (notes), and the commodities tracked by ETCs serve as collateral for the note. The price of ETCs rises and falls with the underlying commodities; like other investment funds, ETCs charge an asset management fee. Using them as collateral reduces the risk of default by the underwriter of the note. ETCs are similar to exchange-traded notes (ETNs), except that ETCs are backed by assets in a physical commodity, while ETNs are not.

**ETNs (exchange-traded notes) are unsecured debt securities that track an underlying index and are traded on major exchanges like stocks. ETNs are similar to bonds but carry no interest payments. They fluctuate in price like stocks. ETNs do not give investors ownership of securities but simply pay out the income that the index generates. As a result, ETNs are similar to debt securities. Investors rely on the issuer to make a good return based on the underlying asset. At the same time, they must be mindful of the risks: the ETN issuer may not be able to repay the principal amount of the debt and default on the bond. In addition, political, economic, legal or regulatory changes could affect the financial institution's ability to make timely payments to investors.

*This recommendation is intended for qualified investors.

How to Buy ETFs?

If you don't have an investment account yet, open it now: this can be done online, in just 10 minutes. All you need to do is fill out a short form and verify your account.

After opening an account, you can buy ETFs in either of the following ways:

Freedom24 Web Platform: In the Web Terminal section, type in the search box, and select the appropriate ETF in the results. Open a secure session in the trading window on the right, select the number of securities you want to buy, and click Buy.

Freedom24 iPhone or Android App: Go to the Price screen and tab the search icon in the top right corner. In the search dialog that will show up, type and select the appropriate ETF in the results. You will then see the ETF in the market watch; tap it and go to the Order tab in the dialog that shows up. Specify the number of securities you want to buy and click Buy.

Go to Freedom24 web platform >>

*Additional information is available upon request. Investment in securities and other financial instruments always involves risks of capital loss. The Client should make himself aware at his own accord, including to familiarize himself with Risk Disclosure Notice. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice. Commissions, fees or other charges can diminish financial returns. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The opinions and recommendations herein do not take into account individual client circumstances, objectives, or needs and do not constitute an investment advice service. The recipient of this report must make their own independent decisions regarding any securities or financial instruments mentioned herein. Information has been obtained from sources believed to be reliable by Freedom Finance Europe Ltd or its affiliates and/or subsidiaries (collectively Freedom Finance). Freedom Finance Europe Ltd. do not warrant its completeness or accuracy except with respect to any disclosures relative to the Freedom Finance Europe Ltd. and/or its affiliates and the analyst’s involvement with the issuer that is the subject of the research. All pricing is indicative as of the close of market for the securities discussed, unless otherwise stated.

  • Sources of information

  • Recommendation evaluation methodology according to Market Research Terms of Use
    Freedom Finance analysts perform a three-stage analysis. They select a promising industry based on the latest news, statistics and industry-specific metrics. They assess the supply and demand situation and its future development dynamics. Industry’s investment attractiveness is mostly affected by the forecasted market growth rates; total addressable market, player concentration level and likeliness of a monopoly formation, as well as the level of regulation by various entities or associations.

    The assessment is followed by the comparative analysis based on the selected sample. The sample comprises companies with a market capitalization of over USD 1 billion, but there is space for exceptions (when the suitable level of liquidity for company’s securities is available on the stock exchange). The selected companies (peers) are being compared against each other based on multipliers (EV/S, EV/EBITDA, PE, P/FCF, P/B), revenue growth rates, marginality and profitability (operating income margin, net income margin, ROE, ROA), and business performance.

    Having completed the comparative analysis, the analysts carry out a more in-depth research of the news about the selected company. They review company’s development policy, information about its current and potential mergers and acquisitions (M&A activity), and assess the efficiency of company's inorganic growth and other news about it over the past year. The main objective at this stage is to identify the growth drivers and evaluate their stability, as well as the extent of impact they have on the business.

    Based on all the data collected, the analysts determine the weighted forecasted figures of company’s growth rates and proposed business marginality, which are used to calculate the company’s multiplier-based estimated value. The said value enables setting the stock price target and stock value growth potential.

    The expected timing of the idea implementation is set depending on the current market situation, volatility level and available forecasting horizon for industry and company development. The forecasting period is normally set between 3 and 12 months.