Meet CoinShares Physical Top 10 Crypto Market ETP

Crypto index ETPs help investors passively reaching a wide range of market. Thanks to their dynamic allocation and the automatic new weighting, they ensure that investors always invest in diversified manner in emerging crypto trends.

Das CoinShares Physical Top 10 Crypto Market ETP (Ticker: CTEN) Forms the performance of the CoinsharesCrapkass TOP 10 Crypto Market Index, which combines the 10 largest crypto-assets after market capitalization (without privacy coins and stable coins). In this article, the structure of the underlying index and the advantages of the new ETP of CoinShares are explained.

Discover the CoinsharesCrass Top 10 Crypto Market Index

The index was developed by the Coinhares product team in cooperation with Compass Financial Technologies. Compass is a pioneer in the development of indices over several asset classes, including raw materials and digital assets. Compass has been creating indices since 2017, which is used today by some of the world's largest financial institutions (Citi, MSCI, JPMorgan, Amundi, Socgen, Euronext).

The Coinshares Compass Top 10 Crypto Market Index consists of the 10 largest digital assets, including both blue chip coins (BTC, ETH) and old coins.

Note: Only for illustration purposes. State of the data: 27.03.2023

Why 10 coins?

This number was chosen on the basis of several factors:

Market representation. The index must reflect the market situation as faithfully as possible. With only 10 crypto coins, the index effectively captures around 80 % of the entire crypto market. The use of less than 10 coins would lead to the trends of the market being grasped less precisely.
Transaction costs. With more coins, the portfolio would certainly be more diversified and would have a higher (albeit marginal) market representation. At the same time, the risk of concentration would be limited – but higher transaction costs would arise.
Limited tradability. The number of crypto assets in question is limited to most traditional securities exchanges, which in turn limits the number of coins that are in question for admission to the index.

If the number of crypto-assets in question decreases to less than 10, the index could include fewer than 10 constituents.

How are the crypto coins selected?

Several criteria are used to record the coins in the index:

The coins must neither be stablecoins, privacy coins or “meme” coins. The index should neither contain stable coins, nor coins, their rules and protocols hide or disguise transactions on their blockchain; Likewise, no coins that are considered a “meme coin”.
Admissibility to stock exchange trading places. Since Coinhares plans to note the ETP depicting the index on Xetra, the German main trading place, the index only includes coins that can be traded on this trading center.
Commercial and liquidity requirements. The coin must have at least one respected stock exchange for digital assets about a liquid trading market. The index committee analyzes various metrics to evaluate liquidity, whereby there is no systematic threshold due to the dynamic nature of the liquidity assessment. If the assets contained in the index are illiquid, they would be more difficult to pursue and act, which would have a negative impact on the ability of the index to efficiently depict the market.
BMR conformity. The acronym BMR stands for the Benchmark Ordinance of the European Union, which specifies a regulatory framework for indices in financial products. All coins contained in the index are BMR-compliant. For example, token such as BNB and FTT meet the criteria mentioned above, but are considered too centralized by the index provider to meet the BMR criteria, which is why they were excluded from the index.
Market capitalization. The index aims to reproduce the coins with the largest market capitalization, which also meet the above criteria.

What is the maximum weighting of the individual coins?

The index provides for a maximum weighting of 35 % per coin. Even if a certain crypto-asset conquers a larger market share, its weighting within the index will never exceed 35 %. The surplus is then distributed proportionately to other coins. This is not the case with most competing ETPs, so that they simply reproduce the market weighting.

We consider an upper limit of 35 % to be important for the following reasons:

Reduction of the risk of concentration. This is very relevant for cryptos because Bitcoin has a strong supremacy.
Greater diversification. The upper limit of 35 % leaves more space for old coins and thus increases diversification. In the long term, this can have a positive effect on risk -adjusted performance.

How is the top 10 crypto market index new?

The index is newly weighted every quarter. This time interval enables the index to react to market changes and at the same time to keep the trade costs – which could increase with more frequent new weighting.

CoinShares Physical Top 10 Crypto Market ETP

Coinshares Top 10 Crypto Market ETP offers a diversified, regulated, transparent and cost-effective passive commitment in the broader crypto market. Since it reproduces the CoinsharesCrass Top 10 Crypto Market Index, it also takes over its structure: 10 constituents, with an upper limit of 35 %, newly weighted.

Physical ETP, for maximum efficiency

The ETP forms the coinsharesCass index physically According to: It buys and keeps the coins contained in the index in the same ratio. The assets are then kept by Komainu, a specialized consolidation for digital assets that are regulated by the Jersey Financial Services Commission (JFSC).

This replication method ensures that the ETP exactly reflects the value of the underlying index. It also offers security at an institutional level. Further information about physical ETPs and its structure can be found in the section “What are physical ETPs?”

Automatic quarterly new weighting by a third party

In order to reproduce the index, the ETP quarterly is weighted by CSCM (Coinshares Capital Market (Jersey) Limited), which acts as a determination point for the product. Investors do not have to do anything that makes the investment in the ETP a good option for a passive commitment.

To 0 % reduced administrative fees

Coinshares is the first-and so far only-ETP emittee to offer these conditions.

How are we able to offer this? Coinshares can use some of the coins from which the index is composed to achieve income.

Who is this ETP intended for?

When developing this ETP, we had two investor profiles in mind:

First crypto ETP buyer. The ETP offers a passive, comfortable and inexpensive commitment in the broader crypto market. You don't have to spend time to research in which cryptos is best invested, and the physically stored structure frees the investors from the restrictions and risks of self -storage.
ETP investors who only invest in an asset. Since the ETP offers a lower administrative fee and a higher commitment in the broader market, it can be an interesting addition to your portfolio.

How do you get access to Coinshares Physical Top 10 Crypto Market ETP?

This ETP is noted on Xetra, the leading German trading center. You can buy it over your usual broker.

After you have logged into the account or app of your online broker, only 3 steps are required:

Search for the product name (Coinshares Top 10 Crypto Market ETP), the ISIN code (Je00Bprdnl86) or the ticker (CTE).
Choose the nominal amount or the number of securities you want to buy.
Give the order to execute.

You can now easily monitor the performance of the ETP in your portfolio.

Invest in the largest cryptos with a single product

Coinshares Top 10 Crypto Market ETP reproduces an index developed by experts, which grouped the 10 largest cryptos after market capitalization and at the same time ensures diversification and automatic rebalancing through an upper limit of 35 %. The ETP is ideal for investors who want to passively invest in crypto in transparent, cost -effective and regulated manner.

On the Product page You can find more details about the ETP.

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