Deutsche Digital Assets Launches Macro-Adapted Bitcoin ETP on Euronext

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

The DDA Bitcoin Macro ETP (BMAC) is 100% physically backed by a basket of cryptocurrencies that make up the Compass FT DDA Bitcoin Macro Allocation Index (DDAMACRO), according to a September 17 announcement from the company. The assets are held in cold storage at Coinbase Custody International Ltd., a regulated custodian.

The ETP carries a total management fee (TER) of 2%.

“With the listing on Euronext Paris, investors in France can more cost-effectively and easily invest in a single Bitcoin macro ETP,” said Dominique Poiger, Chief Product Officer at DDA.

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

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

The quantitative index model analyzes four key macroeconomic factors:

1. Global Growth: Associated with assets sensitive to global economic growth, such as US cyclical stocks and high-yield bonds.

2. Monetary Policy: Associated with assets exposed to changes in US monetary policy, such as emerging market bonds and gold.

3. US Dollar: This factor relates to exchange rates linked to the US dollar.

4. Eurozone Risk: Associated with assets that may be exposed to risks from the European Monetary Union, such as Italian sovereign spreads and the CHF/GBP rate.

Each factor is represented by a basket of assets most sensitive to that 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 movement over a 6-month period, resulting in a final investment signal.

In a higher-risk macroeconomic environment, the strategy will invest more in Bitcoin, while in a lower-risk environment, it will switch to USD Coin to protect capital. This approach is particularly suitable for investors concerned about the volatility of Bitcoin and other cryptocurrencies, offering a balance between the possibility of high returns and risk management, providing a more cautious investment strategy.

While the US market has attracted attention with the approval of Bitcoin and Ethereum spot ETFs, Europe has long been a pioneer in the crypto ETP space. Many asset managers, such as 21Shares, WisdomTree, ETC Group, Valour, and Fidelity, have successfully listed various crypto ETPs in recent years, giving investors exposure to Bitcoin, Ether (ETH), and other digital assets.

As of June 28, the crypto ETP market in Europe had a total asset under management (AUM) of about $12 billion, according to Trackinsight. However, despite the significant numbers, North America still remains the dominant market for crypto ETPs.