A New Door Opens for US Investors as they get Exposure to Bitcoin ETN and Forgets Bitcoin ETF
While the entire crypto space has been tired of waiting for a decision by the U.S. Securities Exchange Commission (SEC) on an upcoming bitcoin exchange-traded fund (ETF) now have an alternative a Bitcoin ETN.
The introduction of BTC ETN trading capability in the United States could be seen as a soft opening for the much sought after Bitcoin exchange-traded fund (ETF). In which the SEC has far remained unmoved in its reticence concerning issuing approval for any BTC ETF.
Swedish company XBT Provider, a subsidiary of UK-based company Global Advisors Limited, has created an exchange-traded note (ETN) called ‘Bitcoin Tracker One’ that can be traded directly with U.S. dollars via the ticker CXBTF. It started trading on the Nasdaq Stockholm exchange in 2015.
According to Bloomberg, starting Wednesday American investors will now have access to Bitcoin Tracker One, and BTC ETN.
Fundstrat’s Thomas Lee announced his excitement at the new listing via Twitter and pointed out the better return on investment.
CRYPTO: @CoinSharesCo just announced a #BItcoin ETN quoted in USD (ticker: CXBTF). Similar to GBTC, so traditional brokerage account can buy. @coinshares products trade at NAV (we talked about before) so returns virtually identical to #Bitcoin https://t.co/j7NNSuoDgn
— Thomas Lee (@fundstrat) 15 August 2018
An ETN is fairly similar to an ETF in the way that they are traded. However, there are a couple of major differences: taxation and credit risk.
In terms of taxation, ETNs are subject to long-term capital gains. This is because only the difference between the price at purchase and at sale is considered taxable.
While ETFs are subject to heavier taxation owing to the fact that the ETF will buy and sell assets within funds. This triggers short-term capital gain tax, which is charged at a higher rate.
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