Investors may not have the long-anticipated Bitcoin ETF they want. Though, U.S. investors now have an alternative – a Bitcoin ETN, or an Exchange Traded Note.
While its listed and regulated in Sweden, the ETN, Bitcoin Tracker One is now quoted in U.S. dollars under the ticker CXBTF. It’s similar to buying an ADR, or an American depositary receipt. Also, unlike a traditional ETFs, an ETN is similar to a bond that is issued as a unsecured debt note by an institution.
The parent company of the ETN is CoinShares Holdings, whose CEO Ryan Radloff notes:
“Everyone that’s investing in dollars can now gain 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.”
Such an investment tool could bridge the Bitcoin knowledge gap, and make it more accessible.
While the fund is down more than 50% on the year with a pullback in the market, once it sees an inflow of cash form U.S. investors that could change.
The ETN Could Lead to the Long-Awaited Bitcoin ETF
If the ETN is widely-adopted by U.S. investors and performs well it may have a positive effect on the SEC’s decision on an ETF. You may remember the much-touted VanEck Bitcoin ETF decision was delayed until September 30, 2018.
However, we may not see a decision that early.
Cryptocurrencies will most likely rally ahead of the September 2018 decision. Though, we could see another sharp selloff on another delay. Investors note we should not anticipate a decision by September 2018, and should rather be looking towards 2019.
In fact, some analysts don’t see Bitcoin ETF approval until February 2019.
Still, the CBOE is confident in approval.
President and COO, Chris Concannon recently told Bloomberg:
“As we chip away at their issues to make them less concerned, at some point they’ll be comfortable with an ETF…Having the underlying futures come to market first, prior to an ETF, I think you have a healthier, more mature market. The problem with a futures-based ETF is, what is the right level of liquidity? It’s never been tested before.”
As we wait on the U.S. SEC, at least we have exposure to the ETN.