Ignoring Crash, Bitcoin Tracking Pioneer Loads Up Full Basket

LAGOS (Capital Markets in Africa) – Undaunted by the crash in cryptocurrencies, the company that created the first exchange-traded Bitcoin trackers now wants to offer a whole basket of digital currencies to bet on.

The plan is to launch an exchange-traded product based on a basket of 5 to 10 such currencies before the end of the year, according to Stockholm-based XBT Provider AB.

This is “something that the market is looking for,” said Laurent Kssis, the company’s chief executive officer, in an interview. “They are telling us ‘I’d just like blended exposure to 5 or 10’ cryptocurrencies.”

XBT has since 2015 offered exchange-traded products to allow more people to invest in the volatile digital currency market, without having to go through all steps of opening a crypto-wallet. It’s risky territory. The lead currency, Bitcoin, has tumbled as much as 60 percent from a peak in December 2017.

The company has found interest in Sweden, which is leading the way to becoming a cashless society, and where regulators have an “open mind approach” to the asset class, he said.

“Sweden is very much ahead of the curve when it comes to a cashless transaction, and there’s even talk of an e-krona,” Kssis said. “The investor base is very receptive to this.”

In the U.S., the Securities and Exchange Commission earlier this month temporarily suspended trading in the company’s Bitcoin Tracker One and Ether Tracker One, citing investor confusion regarding the assets.

Kssis declined to comment on the move by the SEC. In a statement on Sept. 10, the company said the suspension “relates only to trading in the United States, does not apply to trade on the listing market – Nasdaq Stockholm, and does not relate to any action taken or failed to be taken by XBT Provider AB.”

Even after the recent crash in the largest cryptocurrencies, the company is adding more products to attract new investors.

Ryan Radloff, the chief executive officer of XBT owner CoinShares Holdings Ltd., said there are also plans to expand outside of Sweden, to the rest of Europe, U.S. and Asia.

“Other exchanges and jurisdictions are now calling us, wanting our knowledge and know-how to bring these assets to the market,” he said. “So we’re evaluating other markets right now.”

They are setting up further down the road when they envisage that a wide array of assets will become digital tokens and be priced in Bitcoin.

“We’re going to start seeing, over the next few years, the emergence and birth of security tokens,” Radloff said. “And you’ll see a whole onslaught of equities, debt, even currencies and other commodities being tokenized.”

While Bitcoin isn’t a true currency yet, it’s on its way. “We don’t have enough assets priced in Bitcoin yet,” Radloff said. “Mainly because it’s early and it’s volatile.”

As for the recent selloff? “Bitcoin has already died three times,” he said.

Source: Bloomberg Business News