FINANCEBITCOIN

Expanding into the European market, VanEck Bitcoin ETN listed on Deutsche Börse

share
Expanding into the European market, VanEck Bitcoin ETN listed on Deutsche Börse

Asset management firm VanEck has announced that it will launch a Bitcoin index-linked exchange-traded note (ETN) in the European market, which will be traded on the Deutsche Börse Xetra.

Bitcoin ETN

Exchange Traded Note, also known as Exchange Traded Security, is often considered a soft alternative product to Bitcoin ETF in the cryptocurrency field due to the delayed approval of Bitcoin ETF by the U.S. Securities and Exchange Commission (SEC).

Bitcoin ETN allows investors to speculate on the price movement of Bitcoin without worrying about regulation and the security issues of holding Bitcoin. After the ETN expires, the issuer will charge investors an investor fee or tracking fee and buy back from investors at the current index price.

However, the disadvantage of ETN is that it does not actually hold the assets. VanEck claims to use the VWAP Bitcoin Closing Index from financial services company MV Index Solutions as pricing data. This ETN will be open to investors in Germany, the Netherlands, and the UK.

What's special about this is that VanEck emphasizes that the "VanEck Vectors Bitcoin ETN" is an ETN product backed by 100% Bitcoin, and stresses that there will be no transitional premium or discount to the net asset value.

Van Eck: This Bull Market is Different

Founded in 1955, VanEck is renowned for its gold and other precious metal ETFs, with total assets under management of around $44 billion and ranked as the 7th largest ETF issuer in the U.S. in 2019. Gabor Gurbacs, Director of Digital Assets Strategy at the firm, recently pointed out in the official Blog that Bitcoin's bull market this year is significantly different from that of 2017, citing three main reasons:

  • Regulation: The U.S. Office of the Comptroller of the Currency (OCC) announced that financial institutions can freely provide cryptocurrency custody services to the public
  • Institutions: Companies like MicroStrategy and Square have announced allocating their corporate cash reserves to Bitcoin
  • Payments: Global payment giant PayPal supports cryptocurrency trading, facilitating mainstream adoption

Therefore, VanEck believes that Bitcoin's rise this year is not driven by retail investors, and its position as a store of value is increasingly recognized. Investing in Bitcoin is no longer speculative and has the potential to further gain mainstream adoption.