Europe is getting its first ETP based on a Morgan Stanley index

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ETC Group, a dig­i­tal asset-backed secu­ri­ties provider, announced today that it would list Europe’s first index-based cryp­to ETP based on an index from Mor­gan Stan­ley. 

The ETP will be based on the MSCI Dig­i­tal Asset Select 20 ETP and is set to launch on Germany’s Deutsche Börse XETRA in April. MSCI devel­oped the index with ETC Group’s input ear­li­er this month — cap­ping each con­stituent at a max­i­mum of 30%. 

The MSCI Asset Select 20 ETP

The index excludes sta­ble coins, pri­va­cy tokens, and meme-coins and tracks the val­ue of 20 “lead­ing dig­i­tal assets” — includ­ing Bit­coin (BTC), Ethe­re­al (ETH), and Solana (SOL).

The ETP will be phys­i­cal­ly backed, with the under­ly­ing assets deposit­ed in cold stor­age accord­ing to the index com­po­si­tion and weight­ing. Investors with stan­dard secu­ri­ties accounts will be able to buy and sell the prod­uct like shares or ETFs once list­ed. 

Tim Bevan, the CEO and founder of ETC Group, said that this was the first gen­uine broad-mar­ket index ETP in the cryp­to mar­ket. Bevan not­ed that the scope of the index will make the new ETP an ide­al asset allo­ca­tion tool for investors.

EU and ETPs

Europe has long been a fer­tile ground for var­i­ous cryp­to exchange-trad­ed prod­ucts, see­ing its first ETP launched in 2015. 

Since the launch of Bit­coin Track­er One — a prod­uct track­ing the price of BTC — Euro­pean exchanges in Switzer­land, France, the Nether­lands, and Ger­many have each list­ed var­i­ous dig­i­tal asset ETPs. How­ev­er, only a hand­ful of those ETPs were based on index­es, and none have been based on an MSCI index.

Mor­gan Stan­ley Cap­i­tal Inter­na­tion­al is a lead­ing provider of indices — which act as an essen­tial tool for bench­mark­ing a wide vari­ety of assets world­wide. An ETP based on an MSCI index is a notable advance for the Euro­pean cryp­to indus­try, as it legit­imizes the mar­ket for investors from tra­di­tion­al finance. 

Accord­ing to Stephane Mat­ta­tia, the head of the­mat­ic index­es at MSCI, the cryp­to mar­ket has been evolv­ing rapid­ly, dri­ving investor demand for access to cryp­tocur­ren­cies.