Bitcoin ETN, Ethereum Classic listing & more…

Summary

The article discusses recent developments in the cryptocurrency space, including the launch of a Bitcoin Exchange-Traded Note (ETN) in the US, the listing of Ethereum Classic on Coinbase, and Swarm's initiative to offer tokenized shares in Robinhood.

Abstract

The author expresses a continued enthusiasm for cryptocurrencies and blockchain technology despite the current bearish market. The article highlights the introduction of Bitcoin Tracker One (CXBTF), an ETN by XBT Provider AB, which is now available to U.S. investors for trading in USD on the Nasdaq Stockholm Exchange. It also covers the contentious hard fork of Ethereum that resulted in Ethereum Classic (ETC), which has seen increased recognition following its listing on Coinbase. Additionally, the article touches on Swarm's innovative approach to democratizing venture capital by offering fractional shares of Robinhood through tokenization, despite Robinhood's lack of plans for an STO or IPO.

Opinions

The author remains optimistic about the future of cryptocurrencies and blockchain technology, believing that their value extends beyond market prices and trading volumes.
The launch of the Bitcoin ETN is seen as a significant event for U.S. investors, providing a new regulated financial instrument with exposure to Bitcoin.
The author notes the controversy surrounding hard forks in the cryptocurrency community, using Ethereum Classic as an example of the divisive nature of such events.
Ethereum Classic's listing on Coinbase is acknowledged as a major milestone for the cryptocurrency, although its future is considered uncertain due to its lack of backward compatibility and Ethereum's transition to a Proof of Stake protocol.
The author views Swarm's tokenized shares offering as an interesting development in the venture capital space, potentially opening up new investment opportunities for accredited investors.

Bitcoin ETN, Ethereum Classic listing & more…

It will take more than falling prices of the Cryptocurrencies to fade my enthusiasm about the digital coins & the associated blockchain technology. I don’t really blame people who just look at the ongoing bearish price action in Cryptos and feel the short-term movements reflect their failing.

There is more to the technology than trading volumes & falling prices and the continuous developments will prove this point in the long run. There is so much choice of trading instruments alone now, it’s hard to believe the digital coins are going away anywhere. Let’s take a look at some of the developments last week.

Bitcoin ETN Launch

With everybody anxiously waiting for U.S SEC‘s (Securities & Exchange Commission) decision on the Bitcoin ETFs, U.S investors or anyone trading in the Greenback now has another choice with exposure to an ETN — Exchange-Traded Note. Here are the key characteristics of the ETN.

Floated by XBT Provider AB, a company owned by CoinShares

Trades as Bitcoin Tracker One (CXBTF)

This regulated financial instrument has been listed & traded on the Nasdaq Stockholm Exchange (Sweden) since 2015

Originally trading only in Euro & Swedish Krona, it will now be quoted in US dollars but the settlement & execution of the trade will still take place in the home market

For US investors it will be like buying a foreign listed asset in USD

The key difference between an ETF & ETN is that while ownership in the former represents a stake in the underlying commodity while the latter is backed by the issuing authority which can be a bank or any financial institution

The ETN is similar to an investment product launched by Grayscale in the form of Bitcoin Investment Trust (GBTC) in the US, however, a drawback of the GBTC is that it trades at a significant premium to the actual market price of Bitcoin.

Ethereum Classic Listing

Hard forks in the Cryptoverse rarely come off without controversy even more so when they are from popular coins or digital platforms. Bitcoin Cash was perhaps the biggest example, but the one that has recently taken the headline space has been Ethereum Classic (ETC). It got the Ethereum developers community at odds to each other since the non-backers thought this puts the entire ETH blockchain at risk, nonetheless, the split happened.

The offshoot of Ethereum has been in existence since 2016 but has gained recognition recently when Coinbase, one of the biggest Crypto exchanges, decided to list it on their platform. ETC basically offers the capability of executing complex smart contracts with an emphasis on the IoT applications as their biggest plus point, but the lack of backward compatibility counts as its biggest drawback specially considering the fact that Ethereum (ETH) is moving to a new more efficient PoS (Proof of Stake) protocol from the current PoW (Proof of Work).

Looking at the technical chart of ETCUSD, it managed to bounce a little from the lows after the listing, however, the gains remain capped & below the resistance zone as the general Crypto market remains subdued. The future of ETC hangs in the balance.

Tokenized Shares

A new Crypto startup company Swarm has found an ingenious way of democratizing Venture Capital. They are basically attempting to give the investors the ability to buy fractional shares in the privately held popular crypto trading app Robinhood, which BTW has no plans of offering STO (Security Token Offering) or the traditional IPO (Initial Public offering) anytime soon. Swarm basically intends to accomplish this by sourcing equity from the former employees of Robinhood who want to cash out before the eventual IPO of the company.

This equity will be held in a shell company whose shares will be listed in the form of SRC-20 tokens on the Swarm platform. This apparently can be accomplished without the knowledge of Robinhood, which actually has stated its ignorance on this new development. Investment in these Swarm tokens will be restricted to accredited investors with a net worth of $1 million or an annual income of $200,000 (or $300,000 combined) as per the regulations. It will be interesting to see how this new form of VC develops.

Stay tuned for the constantly evolving world of Cryptos/Blockchain as it changes the global landscape in a fundamental way.

Originally published at www.datadriveninvestor.com on August 18, 2018.