Purchase Bitcoin, But Without Purchasing Bitcoin? Bitcoin Tracker One Launches An Exchange-Traded Note
The cryptocurrency market has not been secretive about the damage happening in their industry. Hundreds, if not thousands, of tokens have suffered losses that could drive them into the ground, and they are hanging on by a thread. With this kind of performance, there are many of consumers that want to hold back from the investment, and justifiably so. However, there is a new opportunity for consumers that want to get into cryptocurrency without the use of Bitcoin at all.
Some people may think that this new opportunity is the highly-publicized option to establish a U.S. exchange-traded fund. Instead, it is an exchange-traded note. The annoucement was made on Wednesday about this product, which is called Bitcoin Tracker One, and it will be regulated and listed in Sweden. Still, investors can purchase it just as easily as Bitcoin, if not more so, under the ticker CXBTF. It is not a new product at all, and it has been traded on the Nasdaq Stockholm exchange for the last three years. Though crypto ETFs have been repeatedly denied or delayed by the SEC, some experts are referring to this as a “soft opening of sorts” for this type of product, like Bloomberg.com.
Ryan Radloff, who is the CEO of CoinShares Holdings Ltd., is part of the company that is supporting the development of the ETN. He said, “Everyone that’s investing in dollars can now get exposure to these products, whereas before, they were only available in euros or Swedish krona.” Continuing, he said, “Given the current climate on the regulatory front in the U.S., this is a big win for Bitcoin.”
To understand the Bitcoin Tracker One, the easiest way to explain the function and use of it is by comparison to an American depositary receipt. When these purchases of “tokens” are made, the trader will have an asset available in USD, but will be foreign-listed. Everything that the user gets out of the product will be distributed in USD, while the actual processes are carried out in the currency it is based in. In this case, that is Sweden’s local currency.
There are still a few ways that this investment opportunity is different from exchange-traded funds. ETNs are basically symbolic of a debt, for which the issuer is supporting. However, it is an alternative to the Bitcoin Investment Trust that Grayscale offers, because it still provides investors with exposure to Bitcoin. Radloff commented that the Bitcoin Tracker One is, as he puts it, “a competitive product.” This could be due to his next comment, saying, “Our products historically have not traded at a premium and are liquid.”
Like the cryptocurrencies have done, Bitcoin Tracker One has seen a fall this year, but only by 51%, whereas the loss to crypto tokens happens to be over 80% for most of them. All of the notes are based on the issuance of XBR Provider AB, which worlds underneath CoinShares Holdings. CoinShares Holdings purchases Bitcoin as the middleman, while the subsidiary provides the value, in exchange for a debt.
Presently, the U.S. SEC has not provided any comments on how their actions have impacted the crypto market.