Recently, I’ve been wondering about crypto’s NEXT BIG MOMENT. What it will look and feel like when institutional money starts pouring in.
So I did a little digging…
I found out that what’s new in this country is old hat in other parts of the world.
A bitcoin exchange-traded product has been around in Europe since 2015! An ethereum one has been around since 2017.
Now, these are ETNs or exchange-traded notes. They’re not exactly ETFs (exchange-traded funds), but they’re very similar. Unlike ETFs, they don’t allow for ownership in a pool of securities. Rather, they’re debt instruments that mature.
But, like ETFs, they follow an underlying index. These ETNs follow indexes that mirror the price of bitcoin and ethereum, with the repayment of principal depending on how the index performs.
Europe Before the U.S.
In 2015, a small Swedish company named XBT Provider listed two bitcoin ETNs on the Stockholm Nasdaq exchange – one following bitcoin prices in Swedish krona and the other following prices in euros.
It was a first for Sweden and for Europe.
Anyone could invest. Participants ranged from everyday investors buying as little as $500 to large European institutional clients investing millions. Even with access to institutional investors, these exchange-traded products grew slowly at first.
And then 2017 happened.
It was a breakthrough year. XBT introduced its two Ethereum ETNs. And they took off. Within four months, it had more than $350 million of assets under management (AUM).
XBT followed those two funds with a token fund that tracked ethereum-based ICOs.
It was also a banner year for expanding the accessibility of its bitcoin and ethereum funds. Its customer base grew sevenfold. Brokers and banks from the U.K. (Hargreaves Lansdown), Italy (UniCredit), France (Société Générale), Germany, Belgium and Spain made the funds available to their customers for the first time.
