New York-based fund manager VanEck has launched a bitcoin-focused exchange traded note on the Deutsche Borse Xetra exchange, following the example of other European ETF issuers.

The VanEck Vectors Bitcoin ETN has a total expense ratio of 2% and tracks the MVIS CryptoCompare Bitcoin VWAP Close index will enable investors to gain exposure to the cryptocurrency without having to buy it directly themselves.

The fund manager has partnered with Liechtenstein-based custodian Bank Frick which will provide “cold storage” for any deposited bitcoins.

This is in contrast to the use of a digital ‘wallet’ whereby the cryptocurrency is stored separately on the blockchain and allows investors to buy and sell the new product in the same way as other regulated exchange-listed products, according to VanEck. 

The launch follows a decision by the German regulator BaFin earlier this year to approve the use of bitcoin for various investment products including ETNs.

“Bringing to market a physical, fully-backed major exchange-listed bitcoin ETP was a top priority for our firm,” said Gabor Gurbacs, VanEck’s director of digital asset strategy.

VanEck is the third European ETF issuer to list such a product on the German exchange, after ETC Group and 21Shares, which listed their own ETPs in June and July respectively.

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