Soft Alternative to Crypto ETFs Launched
According to mainstream media reports, a Bitcoin based ETN (exchange traded note), which is listed on the NASDAQ Stockholm exchange in Switzerland, is now targeting US investors.
An Alternative to Crypto ETFs
A large number of investors in the US have been clamoring for a Bitcoin based ETF (exchange traded fund) which is approved by government regulators. Unfortunately for them, the SEC (Securities and Exchange Commission) in the US has repeatedly shot down these petitions, the latest once being as recently as last week. These requests are being denied on grounds of issues with liquidity as well as suspicions of price manipulation.
Cboe Global Markets Inc. had applied to the SEC to list a fund that was designed by the crypto-entrepreneurs, the Winklevoss twins, Tyler and Cameron. However, the SEC turned down this application last month. And then, just last week, the team of VanEck Associates Corp. as well as SolidX Partners Inc. saw the decision on their application for a competing ETF being postponed till September.
Now, there is a kind of a soft opening for ETFs in the country, in the form of Exchange Traded Notes (ETNs).
The difference between the two types of products is simple. ETFs are a pool of assets that trade like regular stocks on a stock exchange. ETNs, on the other hand are debt instruments backed usually by a bank (or another issuer) and focus on complex strategies that don’t quite find into funds.
Bitcoin Tracker One
Starting this week, investors will be able to buy Bitcoin based exchange traded notes (ETNs), despite the fact that the product is listed in a Swedish stock exchange.
The ETN is called Bitcoin Tracker One and is has the ticker symbol CXBTF. While this ETN has been traded on the Stockholm exchange since 2015, it was only available to investors in Euros or Swedish Krona. This week onwards, American investors will also be able to buy this product in US Dollars.
According to the Chief Executive Officer of CoinShares Holdings Ltd. (which is the parent company of the ETN), Ryan Radloff, considering the currently regulatory climate in the US, being able to offer this product to Americans is a big win for Bitcoin.
American investors trading in Bitcoin Tracker One will find it similar to trading in US depository receipts, meaning they will see a foreign asset listed in US Dollars. To do so, they will need to buy F-Shares, which means that the ETN trades while being executed in USD, would see all settlements, custody and clearances being done in the Swedish market.