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VanEck Lists Bitcoin ETN Amid Wave of Interest in Cryptocurrency

Bloomberg logoBloomberg 11/26/2020 Gregor Stuart Hunter and Joanna Ossinger

(Bloomberg) -- Van Eck Associates Corp. launched a Bitcoin exchange-traded note on the Deutsche Boerse Xetra exchange to capitalize on a wave of interest in digital currencies.

The note, which has $2 million in assets, is fully invested in Bitcoin, partially insured and held offline with a crypto custodian in so-called “cold storage,” providing some protection against theft by hackers.

“The next phase of growth in Bitcoin and digital assets requires well-regulated access vehicles that fit into the established financial markets,” said Gabor Gurbacs, director of digital asset strategy at VanEck. The ETN bridges the gap between digital assets and mainstream financial markets, he added.

While there are other European-listed Bitcoin exchange-traded products, U.S. regulators have blocked recent attempts to list similar vehicles, citing worries such as liquidity, custody and manipulation in cryptocurrency markets.

graphical user interface: Digital coin's jump helped stoke surge in Bloomberg crypto gauge this year © Bloomberg Digital coin's jump helped stoke surge in Bloomberg crypto gauge this year

Bitcoin has more doubled this year, breaking above $19,000 for the first time since 2017. Increasing purchases by retail investors, institutions and even billionaires have all been cited as factors for the climb.

But the rally has also stirred reminders of the cryptocurrency’s famed volatility, epitomized by the bust that followed the ascent three years ago. Bitcoin tumbled as much as 8.7% on Wednesday, the most since early August, amid growing caution over the recent run up.

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