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Bitcoin needs ETN and ETF

Jan 21, 2019

There have been no significant changes with cryptocurrencies that have more than $1 billion capitalizations. BTC  the first place, while XRP and ETH hold the second and third place respectively. At the same time, XRP trading volumes are quite low while USDT holds second place XRP is sixth.

We highlight that at the beginning of last week, XRP increased from $0.315 to $0.333, adding more than 5.7%. However, today, this cryptocurrency is fixing losses, trading at the lows of last week. Most of the TOP-15 cryptocurrencies had a slight decrease or weak growth, indicating a generally flat trade in the market.

Exchange-Traded Notes (ETN) are banks’ debt obligations, the value of which is tied to the price of an asset, usually a basket of stocks, bonds, or commodity futures. Exchange-Traded Funds (ETFs) are investment funds which shares are traded on an exchange.

Once again, the network reported that representatives of the Chicago Board Options Exchange (CBOE) mentioned the need in creating an investment tool based on Bitcoin. The head of CBOE, Edward Tilly, said that Bitcoin needs ETN. Tilly focuses on two very important aspects: trust and accessibility. According to him, the creation of ETN based on Bitcoin will significantly increase trust among investors. It is more about individual investors than institutional.

Individual investors consider the availability factor as important.  Compared to ETF, ETN has much lower barriers in terms of trading.

Therefore, exchange-traded notes may become very popular among small investors in North America.

However, in order to implement this plan and increase trust in the cryptocurrency market, there is a need for further development of the legislative framework. According to Tilly, regulators do not approve exchange products associated with Bitcoin, such as ETF, because they cannot protect investors from manipulating the price of an asset in the market. If regulators have the ability to control such products (including ETF, ETN), regulators will approve them.

Bitcoin trading volumes are growing.

The analytical company Chainalysis published a preliminary report, according to which the volume of bitcoin transactions exceeded $600 million in 2018. Comparing this figure with 2017, there is a decrease in the volume of transactions by $ 100 million.

Despite the fact that 2018 was a bearish year for the cryptocurrency market and BTC in particular, trading volumes were increasing over the entire year.

Moreover, the volumes are expressed in USD, that is why, as the price of cryptocurrency decreased, the real volumes of BTC transactions significantly increased.

This may indicate the growing popularity of cryptocurrencies, as well as using them not only as an investment tool but also as a payment instrument.

Constantinople was postponed to the end of February.

Ethereum developers proposed to activate hard fork Constantinople in late February. The upgrade is scheduled for block # 7,280,000, which will take place from February 26 to February 28.

At the same time, the developers excluded the implementation of  EIP-1283 in the upcoming update. Due to the vulnerability of EIP-1283 this hard fork was postponed. Therefore, demand for ETH has markedly declined.

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