The popularity of Bitcoin exchange-traded notes (ETN) on European stock markets continues to grow with VanEck joining the fray. With the US Securities and Exchange Commission (SEC) still set against approving a Bitcoin (BTC) exchange-traded fund (ETF), crypto ETNs are proving to be an attractive proposition in the European market.
VanEck Launches Physically-backed Bitcoin ETN in Germany
Tweeting on Wednesday (Nov. 25, 2020), Gabor Gurbacs, digital assets chief at VanEck announced that the asset management firm had launched a Bitcoin ETN on the Deutsche Böerse Xetra. According to Gurbacs, the news marks a major milestone for the company as it had been planning to facilitate the trading of crypto exchange-traded products (ETPs) on European stock exchanges.
1) Today @vaneck_eu launched a #Bitcoin #ETN. The ETN is physically-backed by Bitcoin and listed on Deutsche Böerse Xetra. Launching a Bitcoin ETP was a top priority for VanEck. We succeeded! VanEck hopes to serve many in Europe and Asia! Resource page: https://t.co/oRpVOQyby2 pic.twitter.com/xnCnTWqMrG
— Gabor Gurbacs (@gaborgurbacs) November 25, 2020
VanEck’s Bitcoin ETN is a physically-backed crypto ETP meaning that the product is 100% BTC collateralized. Thus, each purchased ETN corresponds to a specific Bitcoin amount. Crypto-friendly Bank Frink will reportedly custody the underlying Bitcoin collateral for the ETN in its cold storage facility.
In a press release published on ETF Express, the company remarked that the Bitcoin ETN listing in a regulated marketplace like the Deutsche Börse Xetra would help to improve institutional investor confidence in crypto derivatives. Commenting on the launch, VanEck Europe head, Martijn Rozemuller remarked:
“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.”
According to VanEck, the recently launched Bitcoin ETN will be based on the MVIS CryptoCompare Bitcoin VWAP Close Index which closely mirrors the aggregated BTC spot price across reputable cryptocurrency exchanges. As part of the press statement, the asset management firm also revealed that trading its new Bitcoin ETN will be as uncomplicated as trading an ETF or company stock.
Crypto ETPs Thriving in Europe
Crypto ETPs continue to show significant growth in the European market with regulators in the region open to the idea of tightly regulated crypto derivatives trading. Major stock markets in countries like Switzerland, Germany, and Austria now play host to several Bitcoin ETPs.
Back in Oct. 2019, crypto asset management firm Iconic Funds floated a Bitcoin ETN tied to the New York Stock Exchange (NYSE) Bitcoin Index (NYXBT). The move came amid several Bitcoin ETF rejections by the SEC from different companies.
Earlier in November, the ETC Group Bitcoin ETP with ticker BTCE crossed $100 million in assets under management (AUM) in less than four months after listing.