VanEck, a New York-based investment management company, launched a exchange-traded product backed by bitcoins. It is an ETN (exchange traded note) or market negotiable note, which is listed on the German stock exchange Deutsche Börse Xetra.
In a tweet published on November 25, VanEck’s director of digital assets, Gabor Gurbacs, confirmed the launch of the Bitcoin VanEck Vectors (VBTC) ETN, and assured that the company will offer the sale of the product to its customers and partners in Europe. and Asia.
The manager adds that, by offering the new product through the German platform, investors they will be able to trade Bitcoin notes, just as they do with any other regulated product publicly traded, commonly called ETPs (exchange-traded products).
Similar to bonds, ETNs are financial derivatives that replicate the price of another asset – in this case, cryptocurrency – in a specified time, allowing investors to trade it at the institutional level. In this way, they can participate in the crypto market without the need to buy BTC directly.
On this, VanEck Product Manager, Dominik Poiger, indicated that each ETN is backed by a certain amount of bitcoin. It reports that they are working with Bank Frick, a regulated cryptocurrency custodian in the Principality of Liechtenstein dwhere bitcoins are stored cold.
The company guarantees its users that the euros invested in the ETN will actually be used to buy bitcoins.
The VanEck team adds that the performance of the ETN is directly related to the price of the cryptocurrency. It takes as a reference the MVIS CryptoCompare of the Bitcoin VWAP Close Index.
Van Eck insists on investing in bitcoin, despite SEC rejection
The launch of the VanEck ETN comes a year after it was will withdraw the proposal for the VanEck / SolidX Bitcoin Exchange Traded Fund (ETF).
The withdrawal occurred one month before the date scheduled for the United States Securities and Exchange Commission (SEC) to make the final review. Prior to that, the US supervisor had already rejected the New York-based company’s applications three times since 2017.
The refusal has been repeated to other similar projects, so – so far – no ETF proposals have received SEC approval. According to CriptoNoticias publications, the body cites as important issues for its decision the concern about market manipulation, its vigilance and a possible divergence with future negotiations.
Given the SEC’s refusal, everything indicates that VanEck chose to go to the European market to specify its plan, although instead of an ETF it chose an ETN. Unlike ETNs, ETFs are mutual funds listed on the stock exchange, whose stocks and bonds can be bought and sold over the course of a session at the existing price on the stock market.
Gurbacs says the company is committed to supporting bitcoin-centric financial innovation. For this reason, bringing to the market a derivative “that is listed on a major stock exchange and that is fully supported” has been one of the company’s priorities. He thus expresses VanEck’s great interest in the pioneering cryptocurrency, which he defines as “digital gold”.
“The low correlation with other asset classes makes bitcoin a great way to help diversify a portfolio,” said Martijn Rozemuller, VanEck Europe Director. “We will offer investors a product that will allow them to benefit from the performance of the cryptocurrency.”
Bitcoin ETPs can be launched on the Frankfurt city-based Xetra platform since the cryptocurrency received approval from German financial regulator BaFin earlier this year.
With this VanEck ETN, anda total of three Bitcoin ETPs that are included in Xetra. The first was ETC Group, a traded commodity exchange that since June of this year operates in a similar way to the ETC of raw materials that are traded on the exchange. The second is ETN 21Shares, launched in September 2020.