Deutsche Digital Assets Launches Physically Backed Bitcoin Macro ETP

German crypto manager Deutsche Digital Assets has launched a new physically backed Bitcoin ETP which dynamically adjusts its exposure based on prevailing macroeconomic conditions.

German crypto asset manager Deutsche Digital Assets has unveiled a new physically backed Bitcoin exchange-traded product (ETP) that dynamically adjusts its exposure to the flagship digital asset based on prevailing macroeconomic conditions.

The ETP offers a risk-managed approach to Bitcoin investing with an exposure that can vary on a daily basis. The product is designed to enhance or preserve capital in different macro environments.

The DDA Bitcoin Macro ETP (BMAC FP) is now trading on Euronext Paris and Xetra with an expense ratio of 2.00%.

The ETP tracks the Compass FT DDA Bitcoin Macro Allocation Index, which is designed to offer a systematic and adaptive approach to Bitcoin investment.

The index employs a quantitative model that generates an investment signal based on four key macroeconomic factors: inflation, interest rates, stock market performance and the exchange rate of the US dollar against a basket of other currencies. Each factor is represented by baskets of assets that are most sensitive to those factors.

The model generates a momentum score for each factor, which is then used to produce individual sub-signals. These sub-signals are weighted according to their explanatory power on Bitcoin's price movements over a six-month rolling window, culminating in a final, comprehensive investment signal.

Based on this final signal, the index dynamically shifts its exposure between Bitcoin and USD Coin, a stablecoin pegged to the US dollar and backed by dollar-denominated assets held in segregated accounts with US-regulated financial institutions. In risk-on macroeconomic environments, the strategy increases its allocation to Bitcoin, while in risk-off conditions, it tilts more heavily toward USD Coin to preserve capital.

This allocation strategy may be particularly appealing to investors who are wary of the high volatility typically associated with Bitcoin and other cryptocurrencies, offering a means to balance the high returns associated with Bitcoin with the need for risk management.

Each ETP share is 100% collateralized by a corresponding investment in Bitcoin and US Dollar Coin, which are custodied in an institutional-grade ‘cold storage’ custody solution provided by Coinbase Custody International.

Dominik Poiger, Chief Product Officer of Deutsche Digital Assets, said: “The Bitcoin Macro ETP represents a truly unique product that is not simply another cryptocurrency wrapped into an ETP but gives investors exposure to Bitcoin while trying to protect against adverse macro environments.”

Deutsche Digital Assets is a crypto asset manager and ETP provider, offering a range of physically backed products that track the performance of various digital assets. The firm is a subsidiary of Deutsche Boerse, which operates the Xetra exchange and is also a shareholder in Coinbase.

Deutsche Digital Assets recently launched a new Bitcoin ETP on the Deutsche Boerse's Xetra exchange, aiming to provide investors with a regulated and transparent way to gain exposure to the flagship digital asset. The new ETP, dubbed the DDA Bitcoin B ETP (DBTC FP), tracks the performance of Bitcoin on a T+1 basis, with each ETP share fully backed by an equivalent investment in BTC. The product is designed to offer a convenient and secure method of investing in Bitcoin, catering to both institutional and retail investors.

The launch of the new Bitcoin ETP follows Deutsche Digital Assets' unveiling of a crypto ETP earlier this year, which was listed on the Deutsche Boerse's Xetra exchange in March. The ETP, known as the DDA Crypto Basket B ETP (CCBC FP), tracks the performance of a basket of crypto assets on a T+1 basis, with each ETP share fully backed by a corresponding investment in the underlying crypto assets. The ETP is designed to provide investors with exposure to the broader digital asset market.