Giant Investment Management Fund Launches Bitcoin ETN in Europe
As Bitcoin (BTC) attracts more and more institutions, financial products that make cryptocurrency accessible to the traditional market are also emerging. The last of these products is an exchange-traded note (exchange traded bond / ETN) issued by VanEck Europe. The product will be traded on the German German stock exchange Deutsche Börse Xetra, which holds more than 70.65% of the total share in Germany as of last month.
VanEck launches Bitcoin ETN
Although ETNs are similar to exchange traded funds (ETFs), there is an important difference between them. While ETF is representative of a company that buys or sells the asset in question, ETN; It is representative of an asset’s performance. Therefore, an ETN provider does not have to hold the asset in question.
Still, VanEck’s BTC ETN is basically supported at a 1: 1 ratio. This means that the more notes sold, the more BTC the provider needs. As a result, traditional market participants can access Bitcoin’s price action without holding on to it, and their demands will still be diverted to the crypto market.
The total assets of the new ETN are $ 2 million. Investors in Germany, Liechtenstein, the Netherlands, the UK and Asia will be able to invest in this product.
Products (ETPs) traded on the Bitcoin exchange outside the US existed before VanEck’s ETN. A similar product was offered by XBT Provider in early 2015. 21Shares also offers ETPs for Bitcoin, Ethereum, and some cryptocurrencies. VanEck is taking advantage of the global interest returning to crypto. Eliezer Ndinga, a research assistant at 21Shares and Amun Tokens, said the following, according to the report in Crypto Briefing:
WITH THE LEGENDARY HEDGE FUND MANAGER, RAY DALIO, A BITCOIN SUSPICIOUS, BEGAN TO WORRY IF THE LEGENDARY HEDGE FUND MANAGER MISSED SOMETHING ABOUT BITCOIN; THIS MARKET BEGAN TO FIRE UP WITH THE INCREASE OF CORPORATE ADMINISTRATION. AS A RESULT, MORE PLATFORMS ENTER THE SECTOR TO OFFER CORPORATE-LEVEL PRODUCTS TO FINANCIAL INSTITUTIONS
Launching an ETN in Europe could help VanEck’s efforts to create a Bitcoin ETF in the US. VanEck had previously submitted an ETF proposal to the SEC, but withdrew its proposal in September 2019 after multiple decision delays.