Bitcoin Exchange Product ETN Becomes Available for US Citizens

Bitcoin Tracker One (CXBTF), an exchange-traded note (ETN), has been quoted in US dollar, meaning that this type of Bitcoin (BTC) investment product is now available to US investors that want BTC exposure, Bloomberg reported on Wednesday. The move is significant as the US Securities and Exchange Commission (SEC) has rejected several BTC exchange-traded fund (ETFs) proposals and ETNs are viewed as an alternative to ETFs by crypto investors like Thomas Lee.

CXBTF, owned by CoinShares company, has been traded in the NASDAQ Stockholm Exchange since 2015 but added US dollar availability this week. Although it is under Swedish legal jurisdiction, it can be purchased from outside the country, for example as a foreign debt instrument on the US-based over-the-counter (OTC) market.

 “Everyone that’s investing in dollars can now get exposure to these products, whereas before, they were only available in euros or Swedish krona,” Ryan Radloff, the chief executive officer of CoinShares Holdings told Bloomberg. “Given the current climate on the regulatory front in the U.S., this is a big win for Bitcoin.”

ETNs and ETF are different types of financial tools. An ETN is a debt instrument that has the backing of its investors, in most cases a bank. On the other hand, an ETF is backed by an asset pool. For instance, NexGen Economy ETF (BLCN) is the first blockchain-focused ETF on the NASDAQ Stock Exchange in New York. BLCN tracks the Reality Shares Nasdaq Blockchain Economy Index, which consists of companies related to researching, implementing, supporting, and applying the cryptocurrency technology in various sectors.

The US regulator, the SEC, approved several blockchain-focused ETFs but rejected similar financial instruments linked to the largest cryptocurrency, Bitcoin, on the market and consumer concerns.

The CXBTF exchange-traded note is similar to Grayscale Investments’ popular Bitcoin Investment Trust (OTC: GBTC), according to Frudstrat managing partner Thomas Lee.

“CoinSharesCo buys #BTC with each share issuance, which means this ETN functions similarly to an ETF despite differences in structure… Hence, as shares rise/AUM grows, $CXBTF is buying Bitcoin. “ Lee tweeted on Wednesday.

@CoinSharesCo buys #BTC with each share issuance, which means this ETN functions similarly to an ETF despite differences in structure. See excerpt from their Factsheet... Hence, as shares rise/AUM grows, $CXBTF is buying Bitcoin. pic.twitter.com/pjv7COUDoh — Thomas Lee (@fundstrat) August 15, 2018