Second Week of March witnessed heavy drama in terms of Bitcoin price and swaying fundamentals thanks to Winklevoss ETF that was pending approval. The SEC set the date of verdict on 10th March, before which the Bitcoin prices rallied anticipating the ETF approval. Nevertheless, Securities and Exchanges Commission decided to reject the proposal owing to the risks the Bitcoin markets possess in terms of hacks, security and the irregularities in monitoring. Nevertheless Winklevoss brothers are persistent over the ETF as few Bitcoin based instruments that are being actively traded over various markets have set the precedent. Let’s delve deep into what these instruments are and how they are faring:
Europe has been the forerunner in the standardization of the cryptocurrency assets and providing them a platform that is comparable to mainstream assets. A bitcoin backed Exchange Traded Note (ETN) was approved in 2015 in Sweden followed by the approval of a Bitcoin Exchange Traded Instrument (ETI) which was approved in Gilbraltar. The ETI enables indiviudals to invest in institutional instrument that is representative of digital currency. The ETI trades under the ticker ‘BTCETI’ and is approved by Gilbraltar Stock Exchange. The instrument was also approved by Germany’s Deutsche Borse and has found its place in special investment vehicles (SIV).
XBT provider is a publicly traded Bitcoin fund exclusively for Europe. It is designed to track the movements of its underlying asset which is Bitcoin in this case. The fund offers Tracker one(ticker: COINXBT) and Tracker EUR (ticker:COINXBE) in the form of an Exchange Traded Note (ETN). The fund investors have enjoyed good and consistent profits over the period of XBT Provider’s growth.
Bitcoin Investment Trust:
‘Bitcoin Investment Trust’ was launched in 2013 by Barry Silbert, is an open ended trust that is invested exclusively in bitcoin and derives its value solely from the price of bitcoin. It enables accredited investors, with annual incomes greater than $200,000 or assets of more than $1 million, to gain exposure to the price movement of bitcoin for a minimum investment of $25,000 without the challenges of buying and securely storing bitcoin. The price of GBTC shares roughly account for 10% of Bitcoin price and hence people wouldn’t be directly exposed to the risk of Bitcoin. It also gives you additional tax benefits apart from the reduced exposure.