Bitcoin Tracker One is an “Exchange Traded Note” (ETN) designed to provide investors with convenient access to the returns of the underlying asset, U.S. dollar (USD) per bitcoin, less investor fees. Bitcoin Tracker One is authorized by Sweden’s financial supervisory authority, and will be admitted to trading on Nasdaq Stockholm. The average dollar exchange rate of bitcoin from the most liquid exchanges provides the underlying reference price. The first day of trading is expected to be May 18th, 2015.
“We are proud to offer the world’s first “Bitcoin tracker” to be traded on a regulated exchange,” said Alexander Marsh, Chief Executive Officer of XBT Provider. “By enabling this easy and secure way to invest in Bitcoin we hope to have eliminated the boundaries that earlier prevented individuals and companies from being able to actively invest in what we believe to be the future of money.”
“These are exciting times for the Bitcoin ecosystem,” said Board member Staffan Helgesson. “Bitcoin Tracker One will be the world’s first financial instrument that provides consumers and institutions the possibility to invest in bitcoins without holding coins themselves.”
The Bitcoin Tracker One Prospectus, which has been approved by the Swedish FSA, currently is available only in Swedish. XTB Provider AB will hedge all sales of the bitcoin-traded note by buying an equal value in the bitcoin market. A spokesperson for Nasdaq confirmed to CoinDesk that XBT Provider had been approved as a certificate issuer and that its product was the first bitcoin-based item to be listed on the Swedish exchange.
Market maker Mangold Fondkommission, a Stockholm-based brokerage and investment bank, will assist XBT Provider with clearing services and acts as a liquidity provider for Bitcoin Tracker One.
The XBT Provider website states that the company is aiming to attract additional liquidity providers to the order book going forward to complement the natural flow of orders. The goal is offering a liquid market with a small spread, making the instrument attractive for all type of investors.
Bitcoin Tracker One is the latest addition to the growing number of bitcoin investment vehicles that aim to expand bitcoin investments beyond the volatile spot exchanges and attract traditional investors who prefer not to trade bitcoin as currency because they are scared by bitcoin’s wild price swings. Bitcoin Tracker One could become an interesting option for those traditional investors who are persuaded that the dollar exchange rate of bitcoin will rise in the mid- and long term, but prefer not to hold bitcoin directly.
Other similar bitcoin investment vehicles are Barry Silbert’s Bitcoin Investment Trust (BIT), which received formal approval for listing on the OTC Markets Group’s OTCQX exchange with the symbol GBTC, and the upcoming Winklevoss Bitcoin Trust ETF (Exchange Traded Fund), which will be available to investors on NASDAQ with the ticker COIN.
XBT Provider AB (publ) is a public limited liability company formed in Sweden and incorporated under Swedish law, with statutory seat in Stockholm. The XBT Provider website states that the company is backed and guaranteed by KnCGroup, a bitcoin mining hardware manufacturer and service provider that has been targeted by a recent class action lawsuit.
Photo by TS Eriksson / CC BY 3.0