How can Mom-Pop Mainstream get in on owning Bitcoins without actually owning the Bitcoin?
“Everyone that’s investing in dollars can now get exposure to…the ETN. “Given the current climate on the regulatory front in the U.S., this is a big win for Bitcoin.”
A Brand New Very Very Large Pool of Investors
Many see a SEC approved Bitcoin Exchange Traded Fund (ETF) as a major move forward toward global cryptocurrency acceptance. A Bitcoin ETF would give mainstream investors an easy way to purchase the Bitcoin without having to, well purchase the Bitcoin. Mom-Pop Mainstream could then just go to their already established E-trade or Schwab account and purchase the ETF like a stock, easy-peasy, thus opening Bitcoin ownership up to a very very large new channel of investors. However, thus far the SEC has been reluctant to approve any ETF and seems to be signalling it won’t happen anytime soon. The Bitcoin for all panacea is on the shelf for now if not indefinitely, maybe not. AS is often said, where there’s a will there’s a way…in step the ETN.
An exchange-traded note (ETN) is a senior, unsecured, unsubordinated debt security issued by an underwriting bank. Similar to other debt securities, ETNs have a maturity date and are backed only by the credit of the issuer. ETNs are designed to provide investors access to the returns of various market benchmarks.
According to Bloomberg starting Wednesday, investors can buy the Bitcoin via a new ETN. The product technically listed and regulated in Sweden, is called Bitcoin Tracker One, is now quoted in U.S. dollars under the ticker CXBTF. Bitcoin Tracker One is helping brokerages offer the Bitcoin to American investors. It started trading on the Nasdaq Stockholm exchange in 2015.
“Everyone that’s investing in dollars can now get exposure to these products, whereas before, they were only available in euros or Swedish krona,” said Ryan Radloff, the chief executive officer of CoinShares Holdings Ltd., the parent of the company that offers the ETN. “Given the current climate on the regulatory front in the U.S., this is a big win for Bitcoin.”
Bloomberg goes on to say, “Trading Bitcoin Tracker One is now similar to buying an American depositary receipt, in that traders will see a foreign-listed asset in U.S. dollars. Investors can purchase so-called F shares, which means that while the trades are executed in U.S. dollars, they are settled, cleared and held in custody in its home market, according to OTC Markets Group.
Unlike exchange-traded funds, ETNs are debt instruments that are backed by their issuers — often a bank — rather than a pool of assets and often focus on esoteric strategies that don’t easily fit in a fund. Bitcoin Tracker One may give investors an alternative to Grayscale’s Bitcoin Investment Trust, which also offers exposure to Bitcoin. The Grayscale product trades at a significant premium to the underlying asset.”
Bitcoin Tracker One may not be the panacea investors expect to be brought on by a SEC approved Bitcoin ETF, however, if it continues to gain in popularity FOMOs invisible hand may eventually force the market’s hand.