Crypto ETF Race Ramps Up as Deutsche Digital Assets Launches World’s First Macroeconomic-Driven Bitcoin ETP

The “DDA Bitcoin Macro ETP” is 100% physically backed by a diversified portfolio of cryptocurrencies that form the Compass FT DDA Bitcoin Macro Allocation Index.

These assets are securely held in “cold storage” at a regulated custodian. The ETP provides dynamic and systematic exposure to BTC and USDC, optimizing Bitcoin exposure and enhancing long-term risk management using key macroeconomic factors, with a total expense ratio of 2.00%.

Any additional income generated by the underlying assets will be accumulated to the ETP, increasing the coin entitlement. Moreover, due to recent updates by the German Federal Ministry of Finance (BMF) on the tax treatment of virtual currencies and other tokens, German private investors could benefit from tax advantages. Specifically, the physical redemption option embedded in the ETP allows for capital gains to be tax-free after a holding period of 365 days.

Smart Beta Strategies Amid Rising Global Crypto ETF Inflows

The Bitcoin ETF/ETP is designed to offer systematic exposure to BTC and USDC, using key macroeconomic factors to optimise Bitcoin exposure while enhancing long-term risk management.

Volatility and drawdowns associated with cryptocurrencies are cited as some of the deterrents for retail and institutional investors by Marc des Ligneris  who heads quantitative strategies at DDA.

Efforts by DDA to develop smart beta strategies that will provide cryptocurrency exposure in a risk-managed manner over the long term and will reduce its exposure when major macroeconomic factors affect Bitcoin prices negatively.

ETFGI, an independent research firm, stated  that during May, crypto ETFs/ETPs listed globally saw net inflows of $2.2bn year-to-date bringing total net new inflows this year to $44.50bn according to ETFGI.