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November 21, 2021

Can Exchange Traded Products Speed Up Crypto Adoption?

Is it possible for exchange traded products (ETPs) to help increase cryptocurrency adoption in the retail market? If you need to get funds to contribute towards crypto investment, the likelihood is that you won’t go to a bank for that. The very idea sounds alien, even. One expert wants to change that. Commerzbank’s Senior Product Manager of Investing Comdirect wants to bring about innovation in that regard. Rene Delrieux is the Senior Product Manager at this German-based firm and has some interesting ideas.

What is Happening?

Delrieux is currently engaging various players in the German online broker Comdirect. They are attempting to create a streamlined innovation for this challenge. Their goal is to convert bank clients to cryptocurrency clients in the crypto market.

As of now, probably everyone uses personal banking. We use it to open various types of bank accounts for ourselves and our businesses. We also may revert to the bank for help in getting a loan. Sometimes or perhaps placing investments on stock markets around the world. Hardly anyone would consider a traditional bank their go-to for investment in cryptocurrency markets. After all, it seems these industries are somewhat directly opposed. Let us also not forget the instability and controversial nature of cryptocurrency. At the same time, there are contentions with regulators. These contentions are about the lack of cryptocurrency regulation in many parts of the world.

There is a Demand

With all that said, people want cryptocurrency investment solutions. More progressive mainstream banks are experiencing this growing demand. These bank clients would like to benefit from the safety they have with mainstream banking services to avoid the risk inherent in the cryptocurrency markets if they decide to invest directly.

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Forgetting or losing your cryptocurrency password could be the misfortune one faces that lead them to lose access to their cryptocurrency forever. Imagine losing access to all your hard-earned money, just like that. Unfortunately, this is a real concern that has happened to some people around the world, at some point. People have had to come to the devastation of losing their wealth just like that. Though it does not happen to everyone, it remains a real and present concern when investing in cryptocurrency. Delrieux proposes a safer and more comforting solution.

What will Innovation Mean with ETPs?

If they manage to make it work, Delrieux and the stakeholders he is working with at Comdirect could make this a thing of the past. It could become safer and easier for clients to start investing in the crypto market with the safety and ease that clients desire.

Considering that brokerage firms online already provide products similar to cryptocurrency, the concept may not be entirely new. Products such as exchange-traded products like ETFs (Exchange Traded Funds), ETCs (Exchange Traded Commodities), and ETNs (Exchange Traded Notes) are great examples of this. These products can be traded on markets around the world, similar to the way stocks are sold. Adding Crypto ETPs to this array of products is what Delrieux would like to accomplish. One particular one is that of a Savings Plan offering. This savings plan would allow consumers the opportunity to invest for as little as they can afford, as often and for as long as they would like.

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Not everyone likes the idea of what such an innovation would do to the industry. Mostly, investors in the cryptocurrency community. This is likely understandable to a degree. One of the main reasons for this lack of consensus is the idea that part of the appeal of cryptocurrency is its lack of regulation.

But Delrieux, a crypto investor himself since 2017, doesn’t let that bother him. He stated that he is focused on the investment vehicle and not the ideological values of cryptocurrency,” he said.

One thing is for certain: if this solution does make it to market, then Delrieux will have sold a genuine problem for middle-class retail investors who found the market risks a put-off thus far.