Bitcoin Tracker One, a bitcoin-based exchange traded note (ETN), has become the second bitcoin instrument to be publicly traded on a regulated venue.
Units of Bitcoin Tracker One, or BITCOIN XBT, track the prevailing bitcoin-dollar (BTC/USD) exchange rate. They are currently trading at 9.68 SEK on the Stockholm Stock Exchange, which is part of the NASDAQ OMX Group. They are down roughly 3% from their initial offering of 10 Swedish krona (SEK), but remain mostly unchanged in the first hours of trade. Just over 400,000 units have been traded thus far.
The pricing of units is calculated by dividing the average BTC/USD exchange rate taken from Bitstamp, Bitfinex and OKCoin (currently $236) by 200, and then converting to SEK. The decline of 3% accounts for the drop in the USD/SEK rate during the past three weeks.
The ETN was launched by Sweden-based XBT Provider, a subsidiary of KnC Group AB, the parent of well-known Bitcoin mining company KnCMiner. The company, previously unheard of in the industry, announced the instrument’s creation and approval roughly three weeks ago.
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A representative told Finance Magnates that more bitcoin-based instruments, including an exchange traded fund (ETF), are planned in the future. An ETN was the first choice for launch, as it does not involve the physical possession of bitcoins by the administrator and is more cost-effective to manage.
Adam Kostyál, senior vice president and head of European listings at Nasdaq, commented on the launch:
“All asset classes can benefit from the transparency and price formation functionalities of lit market trading. This should therefore help inform institutional and retail investors alike who are seeking investment exposure related to Bitcoin through products like this.”
Shares of Bitcoin Investment Trust (BIT), traded as GBTC on the US OTC Markets, became the first bitcoin instruments available for public trade on a regulated venue two weeks ago. However, Bitcoin Tracker One’s trading venue is technically more rigorously regulated than that of GBTC, although the latter is seeking to upgrade to higher reporting standards.