Bitcoin Exchange Traded Notes (ETN) are here as Swedish company CoinShares launches this product offering millions of investors an opportunity to invest in the dollar to buy bitcoin without actually buying it.
Forget Bitcoin ETFs, Bitcoin ETNs are here
Bitcoin ETFs might not have got the green light yet, but another option has entered the market that allows one to buy Bitcoin without having to actually buy it. This product is called Bitcoin Tracker One, which is issued by the Swedish company XBP provider, a subsidiary of UK-based Global Advisors Ltd.
Bitcoin Tracker One has launched an exchange-traded note (ETN) that tracks Bitcoin (BTC/USD). A non-US security, this Bitcoin ETN is available as an F share quoted in USD and trading on Nasdaq Stockholm exchange, that makes it more accessible to US retirement and brokerage accounts.
Under the ticker CXBTF, despite being listed and regulated in Sweden, now US investors can easily invest indirectly in Bitcoin.
Ryan Radloff, the CEO of CoinShares Holdings Limited, the company that is issuing these ETN, explained to Bloomberg the significance of this product,
“Everyone that’s investing in dollars can now get exposure to these products, whereas before, they were only available in euros or Swedish krona.”
A big win for bitcoin, mass investment coming?
He further added,
“Given the current climate on the regulatory front in the U.S., this is a big win for Bitcoin.”
Similar to buying an American depositary receipt, Bitcoin-Tracking One is basically a foreign-listed asset in US dollars. Investors can now purchase the F shares, that means though trades are executed in US dollar, they will be held in custody, cleared, and settled in the home market only.
The market has been extremely enthusiastic about ETFs that has been repeatedly rejected by the SEC. Now, these ETN’s are an opportunity for investors that unlike ETFs are debt instruments backed by their issuers, which is usually a bank.
This can be an alternative to the bitcoin investment trust available in the market such as that of Grayscale’s that is expensive and has lower liquidity. However, Radloff doesn’t believe so as he comments,
“I do see this as a competitive product. Our products historically have not traded at a premium and are liquid.”
Not everyone is excited of this prospect as several believe it to be far riskier than the ETFs and trying to get a grasp on things as one Redditor shared,
“Is this the one that has been running for 2 years already?”
To which someone replied with,
“Correct but now it’s listed on OTC Markets additionally.”
As for the involvement of fidelity, one shared in part, “Fidelity is just acting as a broker, as you said, the product is offered by Coinshares. It has been offered since 2015. Fidelity has just started offering it to their clients though.”
It is yet to be seen how these ETNs will affect Bitcoin and the market!