21Shares, one of the world’s largest issuers of cryptocurrency exchange-traded products, has listed the region’s first physically backed bitcoin ETP on Nasdaq Dubai.
The listing of 21Shares Bitcoin ETP on the emirate’s bourse is part of company's expansion into the broader Middle East, a key region on its global road map, 21Shares said on Wednesday.
The ETP listing provides investors in the local market with access to the rapidly growing asset class through Nasdaq Dubai. It will trade in the same way as the 21Shares Bitcoin ETP in Europe.
With the addition of Nasdaq Dubai, 21Shares, part of Switzerland-based 21.co, has listed more than 46 products across 12 exchanges in seven countries, it said.
“Our expansion into the UAE is a major milestone in 21Shares’ international growth plans … we are committed to providing regional investors with safe and secure access to cryptocurrency-backed products,” said Hany Rashwan, chief executive and co-founder of 21Shares.
“Our partners Nasdaq Dubai and the Dubai Financial Market share our vision to provide investors with access to new and exciting asset classes.”
The company will support the region in its ambitions to become a global crypto hub, he added.
The listing of 21Shares' ETP underpins efforts by Nasdaq Dubai to streamline investors’ access to diversified asset classes, a key pillar in the bourse’s endeavour to attract further investments, Hamed Ali, chief executive of Nasdaq Dubai and DFM, said.
“Nasdaq Dubai’s world-class infrastructure, broker network and regulatory-focused approach offers fund managers the right environment to bring their products to market.”
The Middle East and North Africa is the fastest-growing cryptocurrency market in the world, accounting for 9.2 per cent of global digital currency transactions from July 2021 to June 2022, according to a report by blockchain data platform Chainalysis.
Individual investors in the Mena region received $566 billion in cryptocurrencies during the period — an annual increase of 48 per cent, Chainalysis said in its 2022 Global Crypto Adoption Index, which was dominated by emerging markets.
Bitcoin, the world’s largest digital currency, plunged from a record high of about $68,000 last year to trade at around $19,000 on Wednesday, while the cryptocurrency sector’s market capitalisation has fallen below the $1 trillion mark.
The sector's rollercoaster ride is far from over, dragged down by this year’s equity bear market, global economic uncertainty, higher interest rates and a sharp rise in the cost of living around the world, according to analysts.
However, investor appetite for crypto products remains strong in the Emirates.
In the July 2021 to June 2022 period, the Arab world’s second-largest economy accounted for 37.2 per cent of total transactions and $38bn in cryptocurrency activity, up from $28bn a year earlier, according to Chainalysis data.
“The UAE, and broader GCC, is a market of significant strategic importance to our business, and we are excited about the opportunity this market opens to us,” Sherif El Haddad, who joined 21Shares in August as head of Middle East, said.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Dubai World Cup nominations
UAE: Thunder Snow/Saeed bin Suroor (trainer), North America/Satish Seemar, Drafted/Doug Watson, New Trails/Ahmad bin Harmash, Capezzano, Gronkowski, Axelrod, all trained by Salem bin Ghadayer
USA: Seeking The Soul/Dallas Stewart, Imperial Hunt/Luis Carvajal Jr, Audible/Todd Pletcher, Roy H/Peter Miller, Yoshida/William Mott, Promises Fulfilled/Dale Romans, Gunnevera/Antonio Sano, XY Jet/Jorge Navarro, Pavel/Doug O’Neill, Switzerland/Steve Asmussen.
Japan: Matera Sky/Hideyuki Mori, KT Brace/Haruki Sugiyama. Bahrain: Nine Below Zero/Fawzi Nass. Ireland: Tato Key/David Marnane. Hong Kong: Fight Hero/Me Tsui. South Korea: Dolkong/Simon Foster.
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Fixtures:
Wed Aug 29 – Malaysia v Hong Kong, Nepal v Oman, UAE v Singapore
Thu Aug 30 - UAE v Nepal, Hong Kong v Singapore, Malaysia v Oman
Sat Sep 1 - UAE v Hong Kong, Oman v Singapore, Malaysia v Nepal
Sun Sep 2 – Hong Kong v Oman, Malaysia v UAE, Nepal v Singapore
Tue Sep 4 - Malaysia v Singapore, UAE v Oman, Nepal v Hong Kong
Thu Sep 6 – Final
Dubai World Cup factbox
Most wins by a trainer: Godolphin’s Saeed bin Suroor(9)
Most wins by a jockey: Jerry Bailey(4)
Most wins by an owner: Godolphin(9)
Most wins by a horse: Godolphin’s Thunder Snow(2)
