VanEck, an investment management company based in New York has announced the launch of a Bitcoin-backed Exchange-Traded Note (ETN). Physically backed by Bitcoin (BTC), this product has been listed on Deutsche Börse Xetra, a trading venue based in Frankfurt, Germany.
While announcing the news on Twitter, the Director of Digital-asset Strategy at VanEck Gabor Gurbacs outlined various features of this product. He said that this product will professionally be managed by VanEck. Bitcoin ETN is one hundred percent collateralized and is backed physically by Bitcoin, the world’s largest cryptocurrency in terms of market capitalization.
2) Important #Bitcoin #ETP Features:
+ Physically backed (100% Bitcoin collateralized)
+ Exchange listed (Deutsche Börse Xetra)
+ Negligible premium/discount to NAV
+ Transparent holdings
+ Transparent prices
+ Investor protections
+ Professionally managed by @vaneck_eu
— Gabor Gurbacs (@gaborgurbacs) November 25, 2020
This new product of VanEck is a great way for investors to build exposure to the leading digital currency. They can gain exposure without having the need to buy Bitcoin directly. This product reflects Bitcoin price’s performance and it will let investors take part directly in the performance of the major cryptocurrency, the firm said in its official press release.
The Head of Europe at VanEck Martijn Rozemuller said, “Bitcoin’s low correlation to other asset classes makes it an excellent way to contribute to the diversification of a portfolio. With our VanEck Vectors Bitcoin ETN, we offer a product that allows investors to benefit from the performance of Bitcoin.”
Commenting on the launch of Bitcoin ETN, Gabor Gurbacs said that it was their top priority to introduce in the market a physically Bitcoin-backed Exchange-Traded product. “Bringing to market a physical, fully-backed major exchange-listed Bitcoin ETP was a top priority of our firm. We succeeded! We hope to serve many clients and partners in Europe, Asia and across the world using our innovative, investment-friendly and regulatory-conscious access vehicles,” he added.
Liechtenstein-regulated cryptocurrency custodian Bank Frick will be providing custodial services to this newly-introduced product in order to ensure the protection and security of Bitcoin. VanEck has formed a partnership agreement with Bank Frick for this purpose. Moreover, the firm revealed in the press release that only 2 percent is the total expense ratio linked with the operation and management of this instrument.
VanEck has been trying in the past to launch a Bitcoin Exchange-Traded Fund (ETF). It attempted to get approval for this product from the United States Securities and Exchange Commission (SEC) several times. However, it did not find any success in receiving approval. The firm has now rolled out the ETN product instead of ETF. Surprisingly, this newly-launched Bitcoin Exchange-Traded Note product has not been listed on a United States exchange.