New Bitcoin derivatives product is launching as a regulated exchange-traded note by Germany’s Iconic crypto startup. The ETN could happen as soon as December 2019 and be listed on the Luxembourg and Frankfurt stock exchanges.
A new company in Germany is looking to list Bitcoin’s products on the Luxembourg and Frankfurt exchange platforms.
According to Handelsblatt, a German business news outlet on Oct. 29, the German startup has already filed an outline to be allowed to trade the exchange-traded note (ETN) for Bitcoin. The ETN is supposed to come to life as December starts this year (2019).
The startup, Iconic, announced that it would enable investors to trade ETN and expose them to the influential cryptocurrency on a marketplace that is strictly regulated. Iconic also added that this ETN would have its Securities Identification Number that is International.
German business daily said that even though this company has its main offices in Frankfurt, their ETN will be supervised by the Luxembourg Financial Supervisory Authority, which is Luxembourg’s finance watchdog.
Iconic will then invest the funds collected from trading ETN into Bitcoin. The Bitcoin is expected to be bought by a major cryptocurrency exchange based in the United States (Coinbase). The head offices for Coinbase are in the US and most of its primary operations, but the company is spreading rapidly to other countries.
ETNs as Blueprints for ETFs
Many investors will see ETNs as a financial product for the ETF (Exchange-Traded Fund). However, ETF is considered a security, which pursues a commodity or particular assets, the issuers’ foster ETNs.
The head of the Blockchain Center of the Frankfurt School of Finance and Management Philip Sandner said,
“Iconic has convinced both regulators and Deutsche Börse. The listing of their Bitcoin product on the Frankfurt Stock Exchange is a remarkable step […] A true Bitcoin ETF Europe is thus a significant step closer.”
The unveiling of the cryptocurrency ETF is a clear indication that the market is fully grown. That is because ETFs will ensure the significant institutional investors get more exposure to these crypto assets. ETNs have been received with less hype than an ETF would.
Experts say that ETN is like a leader for financial products that involve Bitcoin. Regulators are, however, still not that optimistic about ETFs and ETNs. Just this month, the US SEC rejected Bitwise’s application to list an ETF on the New York exchange platform. The Financial Conduct Authority is pondering over a ban on ETNs in the United Kingdom.