How To Invest In Bitcoin & Marijuana ETFs

July 10, 2017

What do bitcoin and marijuana have in common? You might be able to think of more than one answer to that question, but here's the most salient for investors: Neither is available in an ETF wrapper in the United States.

That's not too surprising. Bitcoin has only recently entered mainstream consciousness and has a reputation for being a volatile, unregulated asset. Meanwhile, marijuana, while gaining acceptance in some states, is still illegal to possess, according to federal law in the United States.

In that context, it's not a shock that there's no bitcoin or marijuana exchange-traded products listed on U.S. exchanges―at least not yet―though it's not for want of trying.

SEC’s High Hurdle

Three bitcoin ETFs that have attempted to come to market, the most famous of which is the Winklevoss Bitcoin ETF, which has so far been dismissed by the Securities and Exchange Commission. There's also a marijuana ETF in registration, the Emerging AgroSphere ETF, but it too has yet to be approved by the SEC.

Until those ETFs or something similar comes to fruition, investors who want to buy into bitcoin or marijuana don't have any ETF options—that is, unless they venture outside of the U.S.

This brings up another commonality that bitcoin and marijuana share―both are available to invest in through ETFs outside the country. Here we take a look a look a few of those foreign ETFs that adventurous investors may wish to consider.

From Bitcoin Hedge Fund To ETNs

The Bitcoin Tracker One (COINXBT) is the first exchange-traded product that tracks the price of bitcoin. It's a krona-denominated exchange-traded note listed on the Nasdaq OMX in Sweden, along with its sister product, the euro-denominated Bitcoin Tracker Euro (COINXBE).

The origins of these exchange-traded notes are interesting. The current owner of the notes originally ran a bitcoin hedge fund based in Jersey- Channel Islands. That group ended up buying the issuer of the notes from KNC Miner, a now-bankrupt bitcoin mining firm that couldn't compete with Chinese companies.

 

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