Stockholm-based Bitcoin exchange-traded note (ETN) operator XBT Provider has suspended its plans to offer products based on other cryptocurrencies over instability in the market caused by the blockchain splits, according to a February 13 Bloomberg report.
XBT already operates an ETN product, called Bitcoin Tracker One, which has been listed on Nasdaq Stockholm exchange since 2015. The company was planning to expand its offerings by introducing altcoin -based products in late 2018.
Laurent Kssis, the company’s CEO, revealed that XBT Provider did not understand the ongoing hard forks in the blockchains. The company, however, received a green light from the Swedish regulators in May 2018.
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“It’s important to ask how the community is responding to the split and who’s going to support one asset versus the other,” Kssis told Bloomberg. “If we get it wrong, these assets will drop and if they’re part of the basket we can’t go back because it’s in the final term-sheet.”
The number of hard forks on blockchains increased drastically in late 2017 and 2018. Bitcoin saw the execution of the most number of forks when it was at its peak. Though many forks were executed well to increase the efficiency of blockchains, most of them end up creating a separate chain due to internal politics and disagreements – Bitcoin Cash, Bitcoin Gold, and Ethereum Classic are just a few well-known examples.
What is an ETN?
Similar to exchange-traded funds (ETF), ETNs are also listed and traded on the exchanges. However, ETNs are unstructured products and act as a bond which can be held to maturity, bought, or sold at will.
The crypto market is going through turmoil as the prices of coins are continuously sliding. The once flourishing futures market could also not avoid the bear the bear as Finance Magnates recently reported that BTC futures trading volume is going down drastically since mid-2018 with a record low in last December.