A variation of a bitcoin exchange-traded fund (ETF) has been released for US investors under the ticker CXBTF. Nicknamed Bitcoin Tracker One, it is an exchange-traded note (ETN) that has been listed in Sweden for the last several years and recently made the jump to allow for US investors in USD. The note was created to track bitcoin’s movement and allow for investors to invest in the cryptocurrency without actually getting a wallet and buying the coin.
The ETN is a different method to track bitcoin compared to previous attempts which have been focused on ETFs. The ETF commonly tracks an underlying commodity while an ETF instead follows a debt obligation, often with a derivative embedded. The Swedish creators have been able to manipulate the debt it tracks to be concurrent with bitcoin’s price over its life. This was done by the note issuer purchasing the necessary amount of bitcoin for the debt to be based on.
The is a major step for US investors who have been pushing for some time for an ETF to follow bitcoin. There have been multiple attempts made to introduce this but US regulators have shot down all attempts. Most notably was the failed attempt last month by two major bitcoin influencers, the Winklevoss brothers. The main reason for the these failures is the concerns over liquidity and currency manipulation.
CEO of the ETN creator, Ryan Radloff sees a lot of potential in the product as others have struggled to navigate the space. He commented
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.
Currently Bitcoin Tracker One has seen a decline this year of 51% which sits close to the 54% fall of bitcoin.