ETN vs. ETF: Which Is the Investor's Dream?

There has been a push, through the SEC, to try and get a Bitcoin ETF in place for some time now, starting with the Winklevoss twins' first attempt in March 2017.

The ETN is considered a 'soft' alternative to the Bitcoin ETF that many are chasing after, but even with this move to make it accessible to an audience in the United States, separate from their country's regulations and the U.S. Securities and Exchange Commission, there was not much movement in the market.

An ETF is a marketable security that tracks either an index of funds, a commodity or a basket of assets - and in this case, the asset is Bitcoin.

An ETN, on the other hand - seen as a 'soft' ETF - is a debt instrument that is backed by its issuers, such as a bank, rather than a pool of assets.

"I am going to burst your bubble I know a lot of people want to see an ETF happen, because of 'to the moon' and Lambos and all of that. I still think it is going to happen, I just think it is a terrible idea. I am against ETFs. I think a Bitcoin ETF is going to be damaging to the ecosystem."

Antonopoulos' criticism is not that an ETF would cause prices to drop or investments to stop.

"Everybody is so excited about ETFs, because what we have seen in other markets is [that] when an ETF becomes available - as we saw in gold - the price really increases dramatically, as suddenly that commodity becomes available to a lot more investors. And these investors pile on."

One could assume that a smaller, 'safer' option to an ETF would be snapped up and popular for the institutionalized market, but perhaps these investors are holding out - or are still too bearish.

Jeff Kilburg, the founder and CEO of KKM Financial, explains that Bitcoin and its up-and-down volatility is going to continue until a decision is reached on ETFs and that even the ETN won't have much say in it all.

Kilburg is clearly optimistic about the power an ETF would have on the market, and so is Bart Smith, the head of the digital assets division of the global investment market giant Susquehanna International Group, who says that the ETN has gained some traction, but is nowhere near as explosive as the possibility of an ETF. "What you are seeing now is that we are right back to where we were. A month ago, we were talking about breaking out, but this is a bear market rally. Until we break to new highs, people are not buying."