XBT Provider – CoinShares Bitcoin & Ether Tracker Exchange?

XBT Provider, according to its own website, is a platform that is geared towards providing easier access to cryptocurrency markets, particularly Bitcoin and Ethereum, through allowing investors to purchase exchange-traded notes (ETNs).

What Is XBT Provider?

XBT Provider claims to be based in Stockholm, Sweden. Other than that, the site doesn’t provide any ownership information, stating only that XBT Provider is the issuing entity for any ETNs bought or sold by investors.

Meanwhile, the site’s registration is linked to a Rus Newton, an asset management professional who works with cryptocurrencies. Newton is listed as the owner of Global Advisors (Jersey) Limited, located in the United Kingdom.

Why a company headquartered in Stockholm would have a website registered to a British businessman is beyond us. XBT Provider may be operating as a shell company if it’s owned by Global Advisors and/or Rus Newton. Either way, this lack of transparency doesn’t fill us with confidence.

XBT Provider Product

XBT Provider sells ETNs linked to the Bitcoin and Ethereum markets. For the uninitiated, an ETN is a financial instrument that is used to track an underlying asset. In this case, the asset would be USD per Bitcoin and USD per Ether.

However, to be clear, an ETN is akin to a bond – an unsecured debt note, issued by a financial institution, which can be bought or sold at will or held to maturity. However, investors risk total default if the issuing bank ever goes bankrupt, making them a higher-risk financial instrument than its more stable cousin, the exchange-traded fund (ETF).

XBT Provider Opportunity

ETNs are advantageous because they trigger longer-term capital gains instead of shorter-term ones – resulting in lower overall tax rates – and a lack of tracking errors, as there’s no buying or selling of any underlying asset going on with an ETN. This makes investing in ETNs advantageous.

XBT Provider Verdict

To be quite honest, any discussion of whether or not to invest in ETNs – even cryptocurrency-linked ETNs – is a bit beyond the scope of our reviews. However, we don’t need to be experts on ETNs to tell you that if you are indeed interested in these complex financial instruments in regards to the world of digital currencies, we would recommend that you choose a reputable issuer – especially since any ban or lender that goes bankrupt will completely default on an ETN, leaving you at a complete loss.

With XBT Provider having a strange provenance – hailing from Stockholm but secretly set up by a financial adviser that works and lives in the UK – we’re not sure what kind of credit rating this issuer has, or if it’s a safe investment. There are, of course, other sources for ETNs out there that are likely to be more transparent, which could take more than a bit of the trepidation out of investing blindly with a company you know nothing about – not to mention one that goes to great lengths to not tell you anything about itself.

In other words, there’s just not enough known about XBT Provider to use them as a trustworthy source for ETN investment.

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