There is a large demand among investors, to be able to buy Bitcoin without the digital currency directly to buy. Such products – for example, Futures are available on the market. And Start at the beginning of December last year, Bitcoin had a rally in the direction of US $ 20,000 (€17,500).
However, the biggest price offered for investors – mainly in the institutionalized variant, which is Bitcoin still skeptical – is an exchange-traded Fund (ETF). For some time the SEC tries to make a Bitcoin ETF. The first such attempt came from the Winklevoss twins in March 2017.
Meanwhile, offered a product called Bitcoin Tracker One, traded for 2015 on the Stockholm stock exchange Nasdaq, a so-called Exchange-Traded Note (ETN). This week, this product has been listed, suddenly, in dollars.
The ETN is considered a „soft“ Alternative to Bitcoin-based ETF, and the many want, but to make it even with the step, ETNs of an audience in the United States, regardless of the regulations of your country and the U.S. securities and exchange Commission (SEC), there was a lot of movement in the market.
It seems that even with the Option to buy an ETN, the US investors – and the Wall-Street-money that you could bring to Bitcoin – not curls. There was no real excitement on the market – a market that is notorious for that news serve as a catalyst for the upward and downward movements. This could have to do with this ETN is no ETF, but it could also be the strong bearish sentiment.
Why an ETN or an ETF?
These products, not to allow it to invest with relative safety in Bitcoin, as investors have the real goods, have been praised by many, but they also have their critics.
An ETF is a marketable security that followed either a Fund Index, a commodity or a basket of assets and in this case, the asset is Bitcoin. The SEC should allow a Bitcoin ETF, you would buy the Fund, an underlying amount of Bitcoin and these resources are in stock to distribute, which will then be distributed to the shareholders.
So you make the business for the institutional investors, the ETFs for other equipment and raw materials used, much more comfortable and familiar. And that could be the reason why many think that this could bring a lot of money in the Bitcoin space.
An ETN, however, as a „soft“ ETF considered is a debt instrument that is supported by its Issuer, such as, for example, a Bank, and not by a Pool of assets. Often, these focus on esoteric strategies that do not fit so easily into a Fund.
The interesting discussion of whether such products are needed in the Ecosystem of crypto-currencies, is often exaggerated by the wide and all-encompassing nature of the room. There are traders, Blockchain-engineers, the people who want to earn quick money, crypto-anarchists and crypto-currency purists, all of which work to Bitcoin and other crypto currencies around, and all of your own Beliefs.
Andreas Antonopoulos is totally opposed to the idea of a Bitcoin ETF. He said:
„I will burst your bubble […] I know that a lot of people want an ETF, because of the whole „to the moon“talk and the Lambos and all that. […] I think still, that will come, but I think that it is a terrible idea. I am against ETFs. I think a Bitcoin ETF is the Ecosystem damage.“
Antonopoulos says in his criticism, that an ETF would make the prices fall, or investments brakes. He explains further:
„All of them are so excited about the ETF idea, but only because of what we have on other markets. We have seen that, if an ETF is available – as it was in the Gold of the case – the price rises really dramatically, since this raw material is suddenly a lot more investors available. And these investors are piling up.“
Many consider ETFs as the Kickstart, the the crypto markets need at the moment from a price perspective, but Antonopoulos is of the opinion that the real dangers of the introduction of ETFs lie elsewhere:
„But on the other hand, there are always these claims that these commodity markets are heavily manipulated. And the introduction of these ETFs is institutional investors only, the opportunity to manipulate the prices of raw materials – not only to the markets, as ETF are traded, but also beyond.“
Why this ETN does not move the market
In the light of the claims that ETFs could drive the price of a raw material in the height, while the institutionalised investors are to be placed on the market, it might seem strange that the announcement of this Option – namely, an ETN can be traded with dollars – brought very little movement in the market.
You would think that a smaller, „safer“ Option taken up in comparison to an ETF immediately, and for the institutional market popular. But maybe these investors are still holding back or are still in bearish sentiment.
Jeff Kilburg, founder and CEO of KKM Financial, says that the ascending and descending volatility of Bitcoin will continue until a decision to the ETFs to be made and that the ETN will not change much.
„I think there will still be volatility, but it is really dependent on this exchange-traded Fund. […] These long-term, optimistic buyers need to understand that people worldwide have access to an exchange-traded product, and if this is the case – and there are quite an absolute determination that it does not come in the short term […] in this fall – then I think that the rally continues.“
Kilburg is clearly optimistic in terms of the influence that would have an ETF to the market. Also, Bart Smith, the head of the Department for digital assets in the global investment market giants Susquehanna International Group, says that the ETN has found some popularity, but not nearly as explosive as the possibility of an ETF.
„What you see now, is that we are back where we were. A month ago we talked about an outbreak, but at the Moment we have a rally in a bear market. As long as we achieve new highs, not buy the people.“
Smith follows Kilburns argument that this ETN is not so greatbeta, as a potential ETF:
„she’s not as big as you would be if you would be regulated by the SEC. An ETF in the US that is approved by the SEC – would have a much greater effect. But, if there was something that the new money would bring the price of Bitcoin, then you can imagine that it would make the price rise.“
The Holy Grail of the ETF
With an ETN, the investor is now for US-available – as well as Futures trading, is made possible by a series of institutional trading houses – reached a Bitcoin still no new highs. There is a lot of Hype and excitement around a possible ETF, since the SEC is thinking to continue a number of applications on various Bitcoin ETFs.
although It may say to no one the future of the Bitcoin exchange rate forecast and how is he on the news about an ETF will respond, but most are strongly of the opinion that this will have a big effect. Many believe that a mountain of money just waiting in the Bitcoin space to enter, held back by non-traditional methods of Investment. Is it possible that Bitcoin is coming back over US $ 20,000 (€17,500), if this barrier is breached?