Even though the cryptocurrency sector is going through one of its worst financial runs in quite some time, innovation within this space has continued as usual. Come Wednesday, crypto enthusiasts will now be able to invest in an exchange-traded note that will be technically listed and regulated via a Sweden-based exchange.
This latest offering is called “Bitcoin Tracker One”, and it is currently available via USD under the ticker CXBTF.
What are ETNs? What are they really offering?
One can think of an ETN as a pathway towards ETFs, especially since the SEC has time and again quashed the idea of an ETF due to certain concerns regarding market manipulation and liquidity associated with the asset. For example, earlier this year, the Winklevosses’ had their application for an ETF twice rejected because of the aforementioned fears.
In a similar vein, ETNs can also be considered to be “debt instruments that are backed by their issuers — often a bank — rather than a pool of assets. They, more often than not, focus on esoteric strategies that don’t easily fit into the definition of a regular fund“
With that being said, Ryan Radloff, CEO of CoinShares Holdings, elaborated on the potential use of ETNs and how they can benefit the crypto ecosystem as a whole. Radloff stated that:
“Everyone that’s investing in dollars can now get exposure to these products, whereas before, they were only available in euros or Swedish krona. Given the current climate on the regulatory front in the U.S., this is a big win for Bitcoin.”
He then went on to add:
“I do see this as a competitive product. Our products historically have not traded at a premium and are liquid.”
How easy is to procure an ETN?
In the case of ‘Bitcoin Tracker One’, buying and selling the asset is quite similar to how conventional depositary receipts are obtained. This basically means that potential investors and traders will see the foreign-listed asset in U.S. dollars as usual– following which they can proceed to make a purchase using the aforementioned currency
At press time, the value of Bitcoin Tracker One has been found to have depreciated by over 50% (since January 2018). However, whatever may be the case, this latest development will definitely help Bitcoin draw more market interest from everyday financial investors (both big and small) in the weeks and months to come.