How crypto ETPs time markets
While crypto markets are volatile and operate 24/7, exchange-traded products (ETPs) typically rely on indices which offer a reference price at the end of each business day. Discrepancies in price discovery timing create performance disparities between ETPs tracking the same crypto asset.
Gilles Boitel, head Xtrackers sales for Switzerland and Israel at DWS explained the more volatile the market, the more important it is to look at the precise time at which an investor is capturing the price movement of the underlying asset.
“The issue is using the last price instead of NAV for an ETF comparison. The last trade on a US equity ETF might have happened at 2pm CET while the market will have continued to move until 9pm CET.”
“If the…
