November 25, 2020 - After some unsuccessful attempts in getting approval from the SEC in 2019, the investment management company VanEck has finally announced it gets a Bitcoin-backed ETN to market, to be listed on the Frankfurt-based exchange Xetra.
Following many efforts in 2019 and lobbying to get its exchange-traded fund (ETF) approved by the United States Securities and Exchange Commission, the investment management firm, has officially announced the launching of a Bitcoin-backed exchange-traded product - VanEck Vector Bitcoin ETN. The new product will reportedly allow investors to participate directly in bitcoin's performance, without the need to buy the digital currency themselves.
“Bitcoin's low correlation to other asset classes makes it an excellent way to contribute to the diversification of a portfolio,” says Martijn Rozemuller, Head of Europe at VanEck. “With our VanEck Vectors Bitcoin ETN, we offer a product that allows investors to benefit from the performance of Bitcoin”. However, instead of requiring a so-called wallet, as is customary with cryptocurrencies, in which Bitcoin is stored separately from the rest of the portfolio on the blockchain, the purchase and storage of ETN is as uncomplicated as trading in shares or ETFs.
"VanEck is committed to support Bitcoin-focused financial innovation. Bringing to market a physical, fully-backed major exchange-listed Bitcoin ETP was a top priority of our firm. We succeeded! We hope to serve many clients and partners in Europe, Asia and across the world using our innovative, investment-friendly and regulatory-conscious access vehicles," said Gabor Gurbacs, VanEck's director of digital asset strategy.
In his announcement, Gabor Gurbacs points out some of the fundamentals of the new ETN, which is 100% backed by physical Bitcoin and offers investors direct exposure to the Bitcoin market in the trusted format of other regulated products listed on an exchange. Some of its additional features include transparent holdings, transparent prices, and investor protection.
The performance of the ETN reflects the performance of the MVIS CryptoCompare Bitcoin VWAP Close Index, the price of which is directly linked to that of the Bitcoin.
"Our Bitcoin ETN is fully collateralized. This means that the money invested in the ETN is actually used to buy Bitcoin," said Dominik Poiger, Product Manager at VanEck.
"In this way, each ETN represents a certain amount of Bitcoin," he added.
To ensure the security of Bitcoin, VanEck is working with Bank Frick, a crypto custodian regulated in Liechtenstein, where the Bitcoin are held in “cold storage.” All parties involved can thus be sure at all times that the deposited Bitcoin are in fact available. Bank Frick is one of the European pioneers in the integration of crypto currencies in the regulated banking environment. “Thanks to our early market entry, we can demonstrate established and secure processes and extensive expertise,” says Raphael Haldner, Head of Fund and Capital Markets at Bank Frick
ETN - VanEck Vectors Bitcoin ETN
Index name: MVIS® CryptoCompare Bitcoin VWAP Close Index
Ticker Xetra / Bloomberg: VBTC / VBTC GY
ISIN : DE000A28M8D0
Issuer: VanEck ETP AG
Custodian Bank: Bank Frick & Co. AG
Base currency : USD
Index provider: MV Index Solutions GmbH
Product structure: Full replication
Launch date: 19 November 2020 Total expense ratio (TER): 2.0% p.a. Income treatment: Accumulating
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