What is the difference between ETF and ETN for bitcoin?It is important to know at the end of 2018!Today there are a lot of debates about the bitcoin-
ETF in the crypto-world, which will not be approved by the
SEC of the US, and at the same time on the Swedish stock exchange
Nasdaq Stockholm opened trades for bitcoins (
ETN) for US dollars. Are there any differences between
ETF and
ETN for bitcoin?
ETF is an investment fund whose shares are tied to a certain asset, in this case to bitcoin, and are traded on the stock exchange.
ETF shares are provided with assets, that is, for the issue of securities the fund must acquire a crypto currency.
ETN is an exchange note that is an unsecured debt obligation (receipt) and is tied to the price of a certain asset. Bitcoin-
ETN is a rate for changing the value of a crypto-currency and does not imply its actual purchase or sale.
The difference between
ETF and
ETN is that when
ETF is started, a fund is created, which is bought by bitcoins, and this money goes to kriptonok. And
ETNs are "paper bitcoins", which have only an indirect relation to the crypto-currency market and do not affect its capitalization.
Who are the SEC and the US CFTC and why do they pay attention to them?Supervisory financial bodies of the United States constantly get into crypto-currency news. The
SEC is the Securities and Exchange Commission, and the
CFTC is the Commodity Futures Trading Commission. The task of both services is to protect the rights and interests of investors in the stock and options market. Naturally, under their jurisdiction, it was decided to give control to the Crypto-Currency and ICO.
The competence of the
SEC and
CFTC includes issuing licenses for new trading instruments, such as
ETF,
ETN, futures and others. They also monitor the turnover of securities and have the right to decide on the termination of trading.
Interest in these commissions is due to the fact that the US market is connected with the main hopes for attracting institutional and new investors. But they have not been justified yet.
And it's also useful to understand what security and utility tokens are.Security tokens - These are ICO-tokens that have signs of securities (shares). Buyers of such tokens can expect to receive dividends and participate in the management of the ICO project. They can also be sold on the exchange or exchanged for services and goods of the company.
From the investment point of view, security tokens look more attractive, but there is a nuance. The release of such digital obligations is not regulated at the legislative level and therefore all the advantages of security tokens are provided only by the honest word of the ICO project.
Financial regulators, in particular the US SEC, equate the sale of security tokens to the release of unregistered securities, which is fraught with a fine and the closure of the company. Therefore, such ICOs must register with the SEC or conduct a token in another country with more loyal laws.
Utility tokens - These are ICO tokens that are used to attract funding and can later be exchanged for goods or services of the company, used within a loyalty program or perform the function of an internal currency. That is, utility token has value only within the project or among its clients.
To acquire utility tokens makes sense if the ICO project already has a finished product and you really need it. In other cases, it is buying a "cat in a poke".
If tokens are bought for the purpose of subsequent bargain-hunting, then in fact it is an investment that financial regulators can equate to the issue of unregistered securities. Therefore, when buying tokens, you should look not at their name in White Paper, but in their functions and jurisdiction (country and laws) where the ICO is conducted.
A source:
https://t.me/Coin_PostP.S. Glad to Wink if it was useful. Most recently, we witnessed "Santa Barbara", where the main roles were played by the US SEC and bitcoin-ETF. First, the SEC rejected 2 applications from ProShares and another 7 from other companies, and then reported that they could still change their minds Grin
What do you think, what should we wait for on September 30 and how will this affect the market as a whole?
