After much of 2019 unsuccessfully pushed for the Exchange Traded Fund (ETF) approved by the US Securities and Exchange Commission, Investment management fund VanEck has finally launched an exchange-traded product that is powered by Bitcoin.
According to a Tweet November 25th by the company’s digital asset strategist, Gabor Gurbacs, The product is more of an exchange-traded bond than an ETF and is not listed on a US exchange, but rather on Deutsche Börse’s Xetra.
Instead of being a mutual fund, An ETN is essentially a debt security that tracks a market that is sometimes difficult to access, in this case Bitcoin (BTC).
VanEck Vectors’ Bitcoin ETN is 100% supported by physical Bitcoin and offers investors direct exposure to the Bitcoin market in the trusted format of other regulated, publicly traded products. Product manager Dominik Poiger explained:
“Our Bitcoin ETN is fully guaranteed. This means that the money invested in ETN will actually be used to buy Bitcoin. In this way, each ETN represents a certain amount of Bitcoin. “
The Bitcoin is cold deposited and stored by the Liechtenstein-based cryptocurrency custodian Bank Frick.
VanEck went to great lengths to convince the SEC to approve their Bitcoin ETF in the first part of 2019, but to no avail. The Chicago Board Options Exchange withdrew the proposal in September, a month before it was accepted. The final decision.
As Cointelegraph reported, The company recently released research showing that Bitcoin is less volatile than many of the stocks that trade on the SP 500.