XTB introduces ETN on BTC - an alternative to bitcoin ETFs

The introduction of a Bitcoin ETF has fueled another wave of demand for cryptocurrencies. At the moment, in Europe, including Poland, you cannot invest in record-breaking ETFs. But XTB has prepared an alternative solution for investors that allows investors to expand their portfolio with exposure to cryptocurrencies, without buying CFD on them or investing funds on unregulated crypto exchanges.

The introduction of ETFs on BTC is a milestone

Approval of Bitcoin ETFs by the American stock exchange regulator SEC This is a historic moment for crypto assets. In this way, this form of investing has become much more accessible, and due to the interest of the largest funds in the world, the process of investing in Bitcoin has become more structured.

In recent years, we have often heard about cryptocurrency exchanges that could disappear overnight or become the subject of hacker attacks. However, currently you can, among others: invest in an ETF based on Bitcoin, which is listed on the American stock exchange. Taking into account the regulations that issuers of such funds must meet, taking positions on bitcoin is slightly safer than before. Unfortunately, this solution does not apply to investors from Europe at the moment.

An alternative to Bitcoin ETFs

It is no wonder that the popularity of Bitcoin ETFs and the accompanying boom in the cryptocurrency market cause great interest among investors. This is also the case in Poland, where American ETFs have not yet increased investment opportunities. However, this has changed, as the Polish investment platform XTB added new instruments to its offer.

- In recent weeks, we have been regularly answering investors' questions about when it will be possible to invest in Bitcoin ETFs in Europe. We do not know the answer to this question, but it is certain that such instruments will be available from the first day of listing on European stock exchanges. Nevertheless, seeing the interest of investors in the cryptocurrency market, we decided to find an alternative - says Filip Kaczmarzyk, member of the management board of XTB.

ETN for cryptocurrencies already available in XTB's offer

From Monday, February 19, XTB's offer will include three new funds ETP (Exchange Traded Products), and more specifically ETN, which will give investors the opportunity to take positions on cryptocurrencies. Two of these products will be Bitcoin-only (BTCetc Bitcoin Exchange Traded Crypto [BTCE.DE] i VanEck Bitcoin ETN [VBTC.DE]), while the third one is a mix of the 10 most popular cryptocurrencies currently (VanEck Crypto Leaders ETN [VT0P.DE]).

VanEck Crypto Leaders ETN chart, D1 interval. Source: xNUMX XTB.

- So far, at XTB, we have offered the possibility of investing in cryptocurrencies only through CFD contracts. However, seeing investor demand, we decided to find an alternative for those who are looking for similar opportunities offered by American ETFs. That is why we chose ETNs listed in Europe. These types of instruments, although not very popular, have for years provided the opportunity for individual investors to take positions on hard-to-find instruments with reputable brokers. – adds Kaczmarzyk.

Trading conditions on cryptocurrency ETNs

In the case of all three newly introduced instruments, the situation is similar, i.e.:

• are listed on the German stock exchange in Frankfurt,
• base currency is EUR,
• the commission is 0%* (up to EUR 100k of turnover per month),
• min. the order value is EUR 10,
• short sale is not available,
• Trading hours are 9:00 a.m. - 17:30 p.m. with a 2-minute break at 13:00 – 13:02.

CFD on Bitcoin (blue candles) and the ETN that imitates it – BTCE.DE (red-green candles), D1 interval. Source: xNUMX XTB.

What are ETNs?

ETN (Exchange Traded Notes) is a type of debt instrument listed on the stock exchange on principles similar to shares of listed companies or ETF funds. The ETN issuer replicates the rate of return by committing to pay investors funds equal to the value of the certificates they purchased. It should also be added that ETNs belong to the so-called unsecured bank securities, i.e. in the event of the issuer's insolvency, they are not returned to investors from the Bank Guarantee Fund. However, above all, it should be remembered that investing funds in financial markets is inherently associated with risk, so every investment decision should be approached responsibly.

If you want to learn more about investing in ETNs and ETCs, we invite you to read the publication dedicated to these instruments: “Index investing. Financial instruments of the ETN and ETC type.”

76% of retail investors' accounts record losses as a result of trading CFDs at this supplier. Think about whether you understand how CFDs work and whether you can afford a high risk of losing money.