After it was founded in 1860, Börse Stuttgart has built itself up to be the ninth biggest in Europe and the second biggest exchange in Germany which has now approved the listing of Litecoin and XRP exchange-traded notes (ETNs).
The team at Börse Stuttgart has said:
“For the first time in Germany, investors can now buy and sell exchange-traded notes (ETNs) based on the cryptocurrencies Litecoin and Ripple (XRP). The four securities issued by XBT Provider in Sweden track the price of the two cryptocurrencies in relation to the euro and the Swedish krona.”
Make no mistake, ETNs are different from ETFs although it is true that they are similar as they are both regulated to quite a strict level. They both operate as transparent and protected entities that can be used by investors to invest in several different assets.
The launch of cryptocurrency-backed ETNs on the German exchange is expected to increase the liquidity of Litecoin and Ripple’s XRP token. Specifically those amongst accredited investors and potentially institutions.
As it says on the exchange’s website in regard to cryptocurrency:
“Higher, faster, further – digitization turns the old, analogue world upside down. This also applies to the currency cosmos. While hardly anyone knew how to spell Bitcoin a few years ago, everyone is talking about it. “
Crypto exchanges might be attractive for some users due to their liquidity and ease of access. But for some, the lack of investor protection is still a bit of an obstacle to overcome.
At the end of 2017, the billionaire investor Mark Cuban spoke to Bloomberg at the Vanity fair New Establishment Summit in Los Angeles. Cuban said that he invested in Bitcoin – which remember what just about to hit $20k – through an ETN on a Swedish stock exchange.
The investor said:
“It is interesting because there are a lot of assets which their value is just based on supply and demand. Most stocks, there is no intrinsic value because you have no true ownership rights and no voting rights. You just have the ability to buy and sell those stocks. Bitcoin is the same thing. Its value is based on supply demand. I have bought some through an ETN based on a Swedish exchange.”
The same company that is behind the Bitcoin ETN on the Swedish stock market is looking over both Litecoin and XRP ETNs on Börse Stuttgart. With this, accredited investors would be provided with an alternative platform other than cryptocurrency exchanges to invest in major crypto assets.
The director of blue chips & funds at Börse Stuttgart, Jürgen Dietrich, said:
“There is a lot of interest in cryptocurrencies. These [litecoin and XRP] ETNs will allow investors in Germany to track future price developments of the two cryptocurrencies Litecoin and Ripple (XRP) through exchange-traded securities for the first time.”
Over the course of the past 12 months, the price of Litecoin has surged by more than 180 percent against the US dollar. The very bullish performance of the cryptocurrency was mainly put down to the focus of the open-source developer community of Litecoin on privacy-related.
Earlier this year, the creator of Litecoin, Charlie Lee said:
“Fungibility is the only property of sound money that is missing from Bitcoin & Litecoin. Now that the scaling debate is behind us, the next battleground will be on fungibility and privacy. I am now focused on making Litecoin more fungible by adding Confidential Transactions.
Litecoin dev team spent hours discussing how to add Confidential Transactions. The way to do a softfork CT is very similar to doing extension blocks and extension blk may be simpler and can do a lot more. We are now also exploring doing bulletproof MimbleWimble w/ extension blks.”
With the demand for a Litecoin ETN in Germany is still uncertain and whether it would have a major impact on the state of the Litecoin exchange market at the currency stage of the recovery of the cryptocurrency market is not clear.
During this increasing developer activity and rising value, a noticeable improvement in the quality of liquidity of the asset which would only pile on the momentum for the cryptocurrency.
With Börse Stuttgart being the ninth biggest stock exchange in Europe, it will be interesting to see how this fairs for adoption.
We can hope to see the price momentum be fueled, but adoption is a whole different ballpark.