WisdomTree Unveils 3 New Crypto ETPs as Investors Seek Diversity

key takeaways

Launches on exchanges across Europe come as the firm seeks to offer a more robust toolkit to institutional investors
WisdomTree is exploring plenty more “very interesting projects,” an executive told Blockworks

Asset manager WisdomTree has added three physically backed crypto ETPs as issuers rush to meet demand from investors looking to diversify their digital asset holdings.

The fund group, which manages roughly $80 billion in assets, this week launched solana, cardano and polkadot ETPs (exchange-traded products). The products began trading on exchanges in Germany and Switzerland on Tuesday and hit Euronext exchanges in Amsterdam and Paris on Thursday.

The trio of ETPs, which can be sold across the European Union, carry an expense ratio of 95 basis points.

Jason Guthrie, the firm’s head of digital assets for Europe, told Blockworks its client base on the continent is composed entirely of institutional investors.

“It’s not that you get a handful of clients or one big client saying, ‘I really want cardano or polkadot’ specifically, but rather there is this increasing appetite for an ever-expanding product set,” Guthrie said. “The ability for people to respond to market situations, to adjust their portfolio, to have a more robust toolkit I think is by far the loudest message that we get from our client base.”

The market capitalizations of solana (SOL) and cardano (ADA) are roughly $40 billion and $37 billion, respectively — good for sixth- and eighth-highest among cryptocurrencies, according to data compiled by Blockworks. Polkadot (DOT) ranks 11th, at about $25 billion.

WisdomTree now offers eight crypto ETPs. In addition to bitcoin and ethereum products, the company launched three crypto basket ETPs in November. The Crypto Market (BLOC), Crypto Altcoins (WALT) and Crypto Mega Cap Equal Weight (MEGA) ETPs were designed to offer blended exposure to blue-chip coins, as well as decentralized finance payments, smart contracts and non-fungible tokens (NFTs).

“While Bitcoin and Ethereum grab the headlines, altcoins are now viable options for many institutional investors, providing more options to diversify their crypto holdings just like they would with any other asset class,” WisdomTree Head of Europe Alexis Marinof said in a statement.

In cherry-picking cryptocurrencies for products, Guthrie said the firm evaluates trading volumes and developer activity, as well as the support it has from exchanges and custodians.

WisdomTree is looking into “plenty of very interesting projects,” he added, noting that future exposures could come in the form of single-asset or basket products. Guthrie did not reveal any specific assets the firm is considering.

Exchange FTX and asset manager CoinShares launched the Physical Staked Solana ETP in Germany last week. DeFi Technologies subsidiary Valour launched terra (LUNA) and avalanche (AVAX) ETPs in the country a few days later.

Issuer 21Shares, which has launched a number of crypto ETPs in recent months, plans to have products supporting what the firm considers the top 50 cryptocurrencies by the end of the year, CEO Hany Rashwan told Blockworks.

Guthrie acknowledged the increasing competition in the European crypto ETP space. While it’s important to bring new offerings to market, the executive added, it’s a “balancing act” to ensure the firm maintains a “manageable” product range.

“If you throw too much at the wall, it just becomes confusing to investors,” Guthrie said. “I also think there’s a risk with this space that if you go too far down the list, you can stray into products that are potentially not mature enough yet, are having regulatory issues or have less-established use cases.”

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