Asset Manager Vaneck Launches Physically-Backed Bitcoin Exchange-Traded Note

On November 25, the asset manager Vaneck announced the launch of an exchange-traded product (ETP) called the “Vaneck Vector Bitcoin ETN.” The exchange-traded note is physically-backed by bitcoin and listed on the trading exchange Deutsche Böerse Xetra. The newly listed Vaneck bitcoin ETN provides investors with the opportunity to buy and sell the ETN, and participate directly in the performance of bitcoin without actually purchasing the crypto asset.

There’s a new bitcoin (BTC) exchange-traded note available on the exchange Deutsche Böerse Xetra, a marketplace for the trading of shares and other securities. The novel ETN is issued by the asset manager Vaneck, an investment management firm with an estimated U.S. $49 billion assets under management (AUM). On Twitter, the digital asset strategist and director at Vaneck/MVIS, Gabor Gurbacs announced the new bitcoin ETN on Wednesday.

“Today Vaneck launched a bitcoin ETN,” Gurbacs tweeted. “The ETN is physically-backed by bitcoin and listed on Deutsche Böerse Xetra. Launching a bitcoin ETP was a top priority for Vaneck. We succeeded. Vaneck hopes to serve many in Europe and Asia,” the strategist added.

According to the announcement, the performance of the Vaneck physically-backed bitcoin ETN will be recorded by leveraging the MVIS Cryptocompare Bitcoin VWAP Close Index.

“Our bitcoin ETN is fully collateralised. This means that the money invested in the ETN is actually used to buy bitcoin,” Dominik Poiger, Product Manager at Vaneck explained during the launch announcement. “In this way, each ETN represents a certain amount of bitcoin,” Poiger added. Vaneck has also disclosed that the asset manager has partnered with Bank Frick, a crypto custodian regulated in Liechtenstein.

All of the bitcoin held custodially for the Vaneck Vector Bitcoin ETN will be held in cold storage the company notes. Bank Frick has dedicated time to the integration of cryptocurrencies into the regulated banking environment, the firm’s executive Raphael Haldner detailed.

“Thanks to our early market entry, we can demonstrate established and secure processes and extensive expertise,” the Head of Fund and Capital Markets at Bank Frick, Haldner said. “All participants can – at all times – verify the existence of the collateral,” Vaneck Vector Bitcoin ETN web portal also discloses.

Vaneck’s announcement explains that it is easy to purchase and store the new bitcoin ETN and its “uncomplicated as trading in shares or ETFs.” This is in contrast to creating a wallet and learning the step-by-step process of how to securely store digital assets in a noncustodial fashion.

“With our Vaneck Vectors Bitcoin ETN, we offer a product that allows investors to benefit from the performance of bitcoin,” Martijn Rozemuller, Head of Europe at Vaneck stressed. “Bitcoin’s low correlation to other asset classes makes it an excellent way to contribute to the diversification of a portfolio.”