Crypto ETPs. Ask Virtune

Cryptocurrencies
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Hi!

I am Niclas Bagge, and I serve as the Country Manager for Virtunen in Finland.

I thought I would open a discussion on investing in crypto ETPs and digital assets. I am happy to answer questions regarding, for example, the structure of the products, their differences compared to direct cryptocurrency ownership, regulation (e.g., MiCA), and how crypto ETPs work in practice. It would also be great to hear about your experiences and perspectives.

My intention is not to provide investment recommendations or market individual products, but to offer information on the topic that is as transparent and fact-based as possible. If questions concerning Virtunen products arise during the discussion, I will naturally answer them openly.

Please feel free to ask if there is anything regarding digital assets or crypto ETPs that you are wondering about. I will answer as best as I can.

We offer crypto ETP products listed on Nasdaq Helsinki, which allow you to invest in Bitcoin and other digital assets as easily as in stocks.

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Current developments regarding MiCA regulation and ETPs:

The European Union’s MiCA (Markets in Crypto-Assets) regulation is the first comprehensive regulatory framework for crypto markets across the entire EU. Its goal is to strengthen investor protection, increase market transparency, and establish uniform rules for digital asset service providers. I believe MiCA is a very welcome reform, as it creates a safer and clearer operating environment for both investors and industry participants.

The entry into force of MiCA has simultaneously demonstrated in practice why regulation matters. Some crypto exchanges have had to restrict or suspend their services in Europe because they did not meet the new regulatory requirements. This highlights how important it is for an investor to understand through which service provider or investment solution they are investing in digital assets.

Regulated crypto ETPs (Exchange Traded Products) offer many investors a simpler and safer alternative to direct investing via a crypto exchange. Investing can be done through a standard book-entry account without the need to open a crypto wallet, manage private keys or passwords, or transfer funds between different services. Furthermore, in many cases, an ETP can be included in a savings insurance policy, for example, and tax reporting is handled automatically via a domestic broker.

Investors should also pay attention to the product structure. Not all crypto ETPs are physically backed; some products are synthetic and based on derivatives. In a physically backed product, every issued ETP is backed by a corresponding amount of the underlying digital asset. For example, Virtunen’s products are 100% physically backed, and the underlying assets are held in institutional cold storage by Coinbase.

As digital assets become more widespread, an increasing number of investors value ease, transparency, and regulation. Crypto ETPs offer an opportunity to gain exposure to digital assets in a familiar exchange environment, in the same way as investing in stocks or ETFs.

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Why I believe index products are particularly well-suited for the altcoin market

Many people try to find the next Solana, XRP, or Hyperliquid. In reality, however, the altcoin market is significantly harder to predict than, for example, Bitcoin. Technology evolves rapidly, new projects are constantly emerging, and today’s winners are not necessarily tomorrow’s market leaders.

For this reason, index investing can be a sensible option in the crypto market as well. Instead of trying to guess which individual altcoin will perform best, an index diversifies the investment across several significant crypto assets. If one project’s development falls short of expectations, the progress of others can balance out the overall portfolio.

This same mindset has long been popular in the stock market, where many choose index funds instead of individual stocks. There are now similar options in the crypto space, such as the Virtune Crypto Altcoin Index ETP, which offers diversification across several large altcoins in a single product and regularly rebalances the weightings. While I personally prefer Bitcoin above all else, when it comes to investing in altcoins, I favor index products. Predicting winners in the altcoin market is considerably more difficult, so diversification feels like a logical solution to me.

Among individual altcoins, however, I would highlight Hyperliquid, which I am following closely myself. I believe its decentralized perpetual exchange, which enables trading without a centralized intermediary, is one of the most interesting innovations in the crypto market right now. It remains to be seen how much its ecosystem will grow.

In the long run, the biggest challenge may not be finding the next “moonshot” coin, but rather how to successfully manage risk while capturing the return potential of the broader altcoin market.

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Some feedback on this, as I happened to look at the content of these more closely.

Why isn’t the Virtunen Crypto Altcoin Index (or even one of these indices) weighted by market capitalization? As you wrote yourself, the idea of index investing is precisely to beat the stock picker (or in this case, the crypto picker) who tries to be smart but in practice almost always loses to the market.

As it stands, the index practically falls into the same trap because it doesn’t reflect the market but is instead a curated list. In other words, the index provider is now trying to guess which altcoin will perform best. And now, Tron has been excluded from the index, even though it is one of the largest altcoins.

Alongside Hyperliquid, it is one of the few altcoins that is in the green in 2026. The index investor is now missing out on one of the best investment assets. It is included in the stablecoin index, so technically, it’s not a problem.

The cryptos are also almost equally weighted. For example, XRP is a $65 billion crypto and Gram is $3.8 billion, yet their weighting in the index is the same. The same problem exists in other indices where the weightings do not reflect reality.

I also believe that index investing will certainly become more common in crypto, and there is definitely demand for such products. I would buy a product like this for my Nordnet portfolio today, but the current indices do not reflect the market; they are the views of the index managers.

There are surely knowledgeable people behind the product. However, as an index investor, I specifically want to get away from the views of individual investors and buy the market with weightings that roughly correspond to reality.

In such a product, I believe the manager’s role should only be to adjust the weightings as market capitalizations change.

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Thanks for the good points, Antti.

However, the starting point for Virtunen index products is slightly different from that of a traditional market-cap-weighted index. The goal is not always to reflect the market as it is, but to offer different diversification opportunities.

For example, the Crypto Altcoin Index ETP is intentionally balanced so that each included altcoin has an equal weight. The idea is that no single crypto asset dominates the index, and the investor gains a diversified altcoin exposure. At the same time, it is of course true that this deviates from market-cap weighting and can lead to situations where, for example, large projects like XRP do not receive as high a weight as their market capitalization would imply.

The same line of thinking is also visible in other Virtunen index products. For example, in the Coinbase 50 Europe Index ETP, the weight of Bitcoin is capped at a maximum of 50 percent (even though Bitcoin currently makes up about 59% of the market cap of the entire crypto market). In the Top 10 Crypto Market Index ETP, the maximum weight for Bitcoin is 40%. The goal is to prevent Bitcoin alone from determining almost the entire performance of the index, while simultaneously giving more weight to Ethereum and other significant crypto assets.

In other words, it is more about product design philosophy than an attempt to predict winners. One investor might want the most accurate market-cap-weighted index possible, while another might want broader diversification without one or two crypto assets dominating the entire investment. In my opinion, there is a place for both approaches.

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Standard Chartered released an interesting perspective on tokenization. The bank estimates that the market for tokenized real-world assets (RWA) could grow to approximately $4 trillion by 2028. Article:

In my opinion, however, the most interesting part was not the price forecast, but the reasoning behind it.

If stocks, bonds, funds, and other assets increasingly migrate to blockchains, we will need infrastructure that brings reliable data on-chain and enables interoperability between different networks. Standard Chartered currently sees Chainlink as one of the key players in this development. That forecast is undeniably quite bold.

Chainlink is one of the most interesting infrastructure projects in the entire crypto market. The discussion often centers on Bitcoin or Ethereum, but it is good to remember that the industry also involves more than just traditional cryptos and their ideologies.

We at Virtune also offer the Virtune Chainlink ETP, through which you can invest in Chainlink via a standard book-entry account or equity savings account without needing a crypto wallet.

What does everyone else think? Do you believe tokenization is one of the most significant long-term drivers of the crypto market, or is it still too early?

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Thanks for the replies! Referring to this comment: I would personally like to see an alternative alongside these curated indices that would reflect the true power dynamics of the market. I don’t really see any reason why the share of any cryptocurrency should be capped at some arbitrary percentage figure pulled out of thin air. In practice, that just forces more risk into the index.

There is surely demand for such indices, but I would guess that many investors would just as much like to buy the market without any manipulation. That is, a completely passive index that is rebalanced once a week or once a month, with cryptos added or removed at the same time.

Such things already exist; for example, CMC20 consists of the 20 largest cryptos (excluding stablecoins) in proportion to their market capitalization: CoinMarketCap 20 Index

In practice, just following the top 10 would be enough, as the weight of cryptos ranked 11–20 remains so small. Let’s put something like this on the Christmas wish list!

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Good point, Antti, and thank you also for the concrete example. I fully understand the idea of a purely market-cap-weighted index, where the weights are not capped by pre-defined maximum weightings.

This type of product could definitely be an interesting alternative to existing index products, especially for investors who want an index that is as passive as possible and tracks the market without restrictions.

We will keep this request in mind. Now Santa Claus has at least one more product idea! :grinning_face_with_smiling_eyes:

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A brief update on what is happening with Virtune and the crypto market in Finland.

The past few weeks have once again been extremely active in the market. Bitcoin has risen strongly, already knocking on the 80k threshold, which is quite a surge. However, perhaps even more interesting has been seeing how quickly trading activity has grown in Finland as well. For us at Virtune, this has been particularly visible in Bitcoin, Ethereum, and XRP products, but trading in smaller products, such as Chainlink, has also picked up. An interesting observation is that XRP trading in Finland has been larger than that of Bitcoin. I don’t know if it’s the “lower price” that attracts investors. Be that as it may, the XRP market here is exceptional.

At the same time, we in Finland have continued discussions with banks, asset managers, family offices, and investor communities. One interesting observation is that the discussion no longer revolves around whether “crypto is a relevant asset class,” but rather on what is a sensible way to gain exposure and what kind of allocation might be appropriate. When the market picks up, interest in crypto also awakens very rapidly.

In my opinion, the demand for exchange-traded crypto products is still in a fairly early stage in Finland compared to, for example, Sweden. Therefore, it will be interesting to see how quickly the market develops in the near future if this trend continues.

I would also gladly hear your views here: what would you like to know about Virtune, ETP products, or market development? In the future, I can, for example, shed light on trading volumes, product structure, fees, or what is currently happening on the institutional investors’ side.

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