Bitcoin tracking pioneer wants to load up full basket

Representations of the Ripple, Bitcoin, Etherum and Litecoin virtual currencies are seen on a PC motherboard.
Representations of the Ripple, Bitcoin, Etherum and Litecoin virtual currencies are seen on a PC motherboard.PHOTO: REUTERS

STOCKHOLM • 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 five to 10 such currencies before the end of the year, according to Stockholm-based XBT Provider.

This is "something that the market is looking for", said the company's chief executive officer Laurent Kssis in an interview. "They are telling us, 'I'd just like blended exposure to five 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 is risky territory. The lead currency, bitcoin, has tumbled as much as 60 per cent from a peak in December last year.

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

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

In the United States, the Securities and Exchange Commission (SEC) earlier this month temporarily suspended trading in the company's Bitcoin Tracker One and Ether Tracker One, citing investor confusion regarding the assets.

 
 
 

Mr 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 US, does not apply to trading on the listing market - Nasdaq Stockholm, and does not relate to any action taken or failed to be taken by XBT Provider".

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

  • 60%

    Bitcoin has tumbled as much as this from a peak in December last year.

Mr Ryan Radloff, chief executive officer of XBT owner CoinShares Holdings, said there are also plans to expand outside Sweden, to the rest of Europe, US 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."

The plan is to set up for further down the road, when it is envisaged that a wide array of assets will become digital tokens and be priced in bitcoin.

Mr Radloff said: "We're going to start seeing, over the next few years, the emergence and birth of security tokens... And you'll see a whole onslaught of equities, debt, even currencies and other commodities being tokenised."

The idea is, while bitcoin is not a true currency yet, it is on its way. "We don't have enough assets priced in bitcoin yet," Mr Radloff said. "Mainly because it's early and it's volatile."

As for the recent sell-off? "Bitcoin has already died three times," he said.

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A version of this article appeared in the print edition of The Straits Times on September 18, 2018, with the headline 'Bitcoin tracking pioneer wants to load up full basket'. Print Edition | Subscribe