Given the positive trend in the cryptocurrency market today, you might think that a bitcoin ETF somehow slipped through the cracks. While that isn’t the case just yet, you wouldn’t be too far off. CoinShares, a digital asset management firm domiciled in the Channel Island of Jersey, has announced a bitcoin exchange-traded note (ETN) product that Americans can now get their hands on more easily.
CoinShares chief Ryan Radloff is quoted in Bloomberg as saying:
“Everyone that’s investing in dollars can now get 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.”
As Fundstrat’s Tom Lee pointed out, the ETN, which is dubbed Bitcoin Tracker One (CXBTF), is “quoted in USD” despite the fact that it’s a Swedish-based product. Traders went so far as to suggest that this new product was the catalyst for today’s “green candles,” and if retweets are endorsements, then Fundstrat’s Lee agrees.
The CoinShares ETN is not a new product and has been trading on Nasdaq Stockholm for several years. But now that it’s also based on U.S. dollars, the brokerage community can access it and offer it to U.S.-based clients. Lee likened it to Grayscale’s bitcoin investment trust (GBTC) and noted that it “trades at NAV, so returns are virtually identical to bitcoin.” Indeed, as CoinShares’ bitcoin ETN has shed more than half its value this year alongside the decline in the bitcoin price. Lee provided the following snapshot into Bitcoin Tracker One:
@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
Meanwhile, if you ask CoinShares’ Radloff, the Grayscale product is flawed because of a premium attached to the bitcoin price. Radloff told Bloomberg that CoinShares’ products have managed to avoid the premiums while still providing liquidity.
Wall Street, however, may not be so keen to adopt the product. An investor tweeted that when he attempted to purchase Bitcoin Tracker One in his Merrill Lynch IRA, the product was blocked. This individual was willing to redirect his assets to another firm just to gain access to the ETN and tweeted: “Can someone point me to a new IRA provider that will let me trade this? I’ll move my funds over today.”
Just yesterday, former PayPal CEO Bill Harris said on CNBC that the bitcoin price was headed to zero. But with developments like this bitcoin-esque product making its way into the market, he may have to eat his words.