Virtune Staked Ethereum ETP - What does the included staking mean?


Written by Virtune

Virtune AB (Publ)



This Exchange Traded Product (ETP) offers a unique advantage in being physically backed, meaning that each share in the ETP is directly linked to a share of Ethereum stored with our custodian Coinbase. This differs from other financial products that may be synthetically structured and therefore do not require holding the underlying asset.

One of the most notable aspects of the Virtune Staked Ethereum ETP is the integration of staking into the product. In the crypto world, staking means locking up assets to support and contribute to the network, which in the case of Ethereum, involves validating transactions and maintaining the network's security. As a reward for this service, one receives new ETH, which contributes to an improved return, similar to the interest on a savings account, but often with a higher yield.

What makes the Virtune Staked Ethereum ETP special is that it allows investors to benefit from this staking return without having to handle the technical aspects of the staking process themselves. This is particularly advantageous for institutional investors seeking exposure to Ethereum and its yield opportunities but who want to avoid the operational complexity and risks associated with staking themselves. The reward rate for Ethereum staking fluctuated during 2023 between about 3-7%. For the Virtune Staked Ethereum ETP, where up to 80% of the ETH holdings are staked to allow the product to be freely traded without lock-in, one receives about 2-4% in additional annual yield on top of Ethereum's own price appreciation. This means that the amount of ETH per ETP increases over time despite the fee of 1.40%, in other words, this product offers a better return compared to holding ETH without staking and without a fee.

By using non-custodial staking, where the staking is done directly from cold storage (offline storage) - the safest method of storage, the risks associated with transferring cryptocurrencies to a third party are eliminated. This significantly improves security and gives investors more control over their assets. Virtune only uses well-established and leading staking providers that apply the highest possible security measures.

The Virtune Staked Ethereum ETP is also designed to be easily accessible and simple to invest in as it can be traded directly via Avanza, Nordnet, and Handelsbanken, just like a regular stock, during market hours. This allows investors to easily increase or decrease their exposure to Ethereum with included staking without any lock-up period, just like with any other exchange-traded product.

In summary, the Virtune Staked Ethereum ETP offers investors a secure and straightforward path to both exposure to Ethereum and the opportunity to generate additional returns through staking. This, without having to handle the technical aspects or take on the operational risks associated with cryptocurrency trading and staking. This ETP is a revolutionary product for investors wanting to take advantage of the opportunities blockchain technology offers, with the benefits of traditional asset management.