ETP (Exchange-Traded Product)

ETP (Exchange-Traded Product) is a broad term that encompasses various financial products traded on an exchange, such as ETFs (Exchange-Traded Funds), ETNs (Exchange-Traded Notes), and ETCs (Exchange-Traded Commodities). In the context of cryptocurrencies, an ETP is an investment product that tracks the price of crypto assets and is traded on traditional exchanges like stocks.

Main types of ETPs in cryptocurrency:

1. ETF (Exchange-Traded Fund): An exchange-traded fund that can be either futures-based or physical, tracking the price of one or more cryptocurrencies.
2. ETN (Exchange-Traded Note): An exchange-traded note, which is a debt instrument issued by the issuer that tracks the price of cryptocurrency. Unlike an ETF, an ETN does not involve ownership of the underlying assets — it is a debt instrument linked to the price of the crypto asset.
3. ETC (Exchange-Traded Commodity): An exchange-traded commodity, which allows investment in commodities like gold or oil, but is also used to refer to products that track the price of cryptocurrencies (e.g., Bitcoin and Ethereum).

Differences between ETP and ETF:

• ETF is one of the types of ETPs. While all ETFs are ETPs, not all ETPs are ETFs. ETP is a broader term that can include various types of products.
• In the crypto industry, ETPs are often used to create products that track the value of cryptocurrencies or a basket of assets, but investors do not necessarily own the underlying cryptocurrency directly.

Advantages of cryptocurrency ETPs:

1. Easy access: ETPs are traded on traditional stock exchanges, making them accessible to a broad range of investors.
2. Regulation: These products are often traded on regulated markets, providing greater protection for investors.
3. Transparency: ETPs generally have clear mechanisms for tracking the price of the underlying assets.

Examples of cryptocurrency ETPs:

• 21Shares Bitcoin ETP (ABTC): A popular product that tracks the price of Bitcoin.
• Grayscale Bitcoin Trust (GBTC): A product that is structurally similar to an ETP, although technically a trust, but often considered an ETP alternative for cryptocurrencies.

Conclusion:

ETPs in cryptocurrency provide a convenient way to invest in digital assets through traditional exchanges. These products offer access to crypto assets without the need for direct ownership and storage, while providing the benefits of regulation and ease of use.