What does ETP mean?

ETP as an umbrella term

ETP stands for exchange-traded product: a security traded on a stock exchange that is designed to track the performance of an underlying asset or index. A crypto ETP gives investors exposure to cryptocurrency prices through a brokerage account, without the need to manage private keys. For example, buying a Bitcoin ETP adds the security to the account; it does not transfer Bitcoin to the investor.

The term describes a group of products, not one legal structure. An ETF and an ETN both count as ETPs. An ETF holder owns fund units, while an ETN holder owns a debt instrument. Virtune's ETPs are non-interest-bearing debt instruments.

ETP, ETF and ETN

The category and two structures within it

Term	What it means	What the holder owns
ETP	The wider exchange-traded category	Depends on whether the product is a fund, note or another structure
ETF	A fund traded on an exchange	Units in the fund
ETN	A debt instrument traded on an exchange	A claim against the issuer, which may be supported by collateral

Under the UCITS rules on eligible assets, a fund cannot simply hold bitcoin as its sole investment and be sold as a UCITS ETF. A bitcoin product listed in Europe can instead be structured as an ETN. Its exchange listing does not turn the note into a fund.

What a crypto ETN is explains the note structure in more detail.

Why are crypto ETPs used?

A crypto ETP lets someone follow a crypto asset's price through a listed security in a broker account, alongside other securities. The holder does not need to manage a crypto wallet or private keys. That convenience comes with product fees and exchange trading hours, while the underlying crypto market continues to move outside those hours.

Physical backing

Physical backing means the underlying crypto assets are held as collateral for the securities. The investor owns the ETP, not coins that can be sent from a wallet. Other ETNs may be uncollateralized; tracking the same asset's price does not establish what backs a particular note.

Virtune's physically backed ETPs hold the underlying crypto assets as collateral with a custodian. A collateral agent represents investors in matters concerning the collateral.

Which rules apply to a crypto ETP?

A crypto ETP issued as a security falls under the securities framework. MiCA excludes financial instruments from its scope. MiCA's financial-instrument exclusion distinguishes that framework from crypto exchange and custody services. MiCA and the ETP boundary explains the distinction.

Trading and pricing

An ETP is traded through a broker while its listing exchange is open. Its exchange price is the quoted bid or ask, which can differ from the indicative value of the underlying holdings. A market maker normally posts prices, but liquidity and spreads can change. Market makers provide ongoing quotes, though a quote does not promise that every order will be filled.

The management fee reduces the product's value over time. A trade can also incur a bid-ask spread, a broker commission and possibly a currency conversion charge. These costs affect the investor's result even if the underlying crypto price is unchanged. How buying a crypto ETP works explains what to compare at a broker. The cryptocurrency introduction explains the underlying asset.

Risks of the ETP format

Cryptocurrency prices can fluctuate significantly, including while the stock exchange is closed. This can cause the ETP's price to change sharply when trading resumes. Investors also face risks related to the issuer, the collateral and its custodian. For practical purchase steps, see how to buy a crypto ETP.