Global X, a South Korean-based and now US-established provider of exchange-traded funds, announced this week that it will temporarily eliminate purchase fees for two of its cryptocurrency products. The asset manager will not charge fees on its Bitcoin and Ethereum ETPs for the next 8 months, after which both products will have a fixed fee. The announcement, shared on the company’s website, also added that the fee exemption underscores its ongoing commitment to the European market and its investors.
Background
This decision by Global X comes after the recent introduction of exchange-traded cryptocurrency products in the United Kingdom on May 28. Experts believe that the decision can be understood as an attempt by the company to remain competitive in an increasingly dynamic market. This is because, in May, its competitors, WisdomTree, 21Shares, and Invesco received approval from the Financial Conduct Authority, the UK’s financial regulatory agency, to list ETPs on the London Stock Exchange. Meanwhile, the Global X platform is still awaiting its approval, which could lead to potential customer losses.
What Are ETPs?
ETPs are exchange-traded products that encompass a variety of investment instruments, including ETFs, exchange-traded notes, and exchange-traded commodities. ETPs are designed to track the performance of a financial product and trade on stock exchanges in a manner similar to shares. The first ETPs traded in Europe were launched by the Swedish company XBT Provider in 2015. Since then, the market has grown and includes investors interested not only in ETPs but also in a wide range of cryptocurrencies such as Ripple, Shiba Inu, Cronos, and Decentraland.
Future of ETPs in Europe
The fee elimination announced by Global X will likely attract both professional and small investors. Stock exchanges across most of Europe, as well as in South and North America, have shown that cryptocurrency ETPs, when offered with low transaction costs, can be incredibly popular.
So far, investors throughout Europe have been able to invest in ETPs and other products, such as NFTs and cryptocurrencies through exchange platforms like Coinbase. While Global X’s offer will allow a range of investors to gain exposure to the famous Bitcoin and Ethereum, other platforms facilitate investment in various other options and even cryptocurrency mining, enabling their clients to diversify their portfolio and maximize their profits.
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