Bitcoin Begins Trading on NASDAQ Stockholm

[gentlemand]

Oops... then ETN is dangerous. KNC already failed in their cloud mining contract (though some people claim that the failure was according to their ToS).

Does anyone know how many bitcoins will be traded by the proposed Winklevoss ETF and how Winklevoss will make profit out of it ?

They attracted some serious investment and I assume nasdaq wouldn't be allowing total idiots into their market.

The Winklevii have 100,000 or so coins right now. If they sell more shares then they'll have to obtain more from elsewhere.

[Alley]

If they dont need to back their notes with actual bitcoins then there just selling paper thats the same price of bitcoin.   Or they could issue billions of notes and essentially increase the number of coins that are even available.  What am i missing?

[gentlemand]

Unfortunately all the details are on their prospectus but it's only in Swedish.

I do remember reading somewhere that every note would be backed by coins so maybe it's not quite an ETN.

"XBT Provider AB will hedge all sales of the bitcoin traded note by buying an equal value in the bitcoin market."

http://www.coindesk.com/swedens-nasdaq-exchange-approves-bitcoin-based-etn/

From wikipedia -

"When an investor buys an ETN, the underwriting bank promises to pay the amount reflected in the index, minus fees upon maturity. Thus ETN has an additional risk compared to an ETF; if the credit of the underwriting bank becomes suspect, the investment might lose value, the same way a senior debt would."

"ETNs don't actually own anything they are tracking."

[Alley]

If true that seems like a bad bad idea with bitcoin.  There is a finite number.  Supply and demand goes out the window and price will not go up if there not actually buying any supply.

[gentlemand]

I think they were bright enough to realise that hence the commitment to buy equal amounts of coins per note. I dunno whether that's totally voluntary or whether they have to inform the market if that changes.

We need a Swedish speaker to have a read of the prospectus and clear it up.