Jersey-based asset manager acquires Swedish issuer of bitcoin ETN

NEW YORK (Reuters) - Asset management firm Global Advisors (Jersey) Limited said on Tuesday it has acquired XBT Provider, a Swedish publicly-listed company that launched the world’s first bitcoin-backed exchange traded note.

Global Advisors’ co-founder Daniel Masters declined to disclose the terms of the acquisition, but said the company has taken over XBT’s two ETN products called Bitcoin Tracker One and Bitcoin Tracker Euro.

Both ETNs are available on the NASDAQ/OMX in Stockholm and are accessible in 179 countries.

“It can be hard for some investors to access the bitcoin market,” said Masters in an interview with Reuters on Tuesday. “This gives one-click access to bitcoin by anyone on an electronic trading platform that can access Nasdaq’s global marketplace.”

Global Advisors is based on the Island of Jersey, the largest of the Channel Islands and a self-governing British Crown dependency.

An ETN is a debt security with a maturity date, backed by the credit of the issuer. It’s designed to provide investors access to the returns of a market benchmark.

The acquisition came after the KnC, a Swedish bitcoin miner, filed for bankruptcy about two weeks ago, Masters said. KnC was the majority shareholder of XBT and as part of the miner’s wind-up process, XBT was offered for sale to interested parties.

KnC, which had raised $32 million a few years ago, had struggled as the Chinese have found a way to mine bitcoins with tremendous power at a lower cost.

Bitcoin is created through a “mining” process where a computer’s resources are used to perform millions of calculations. Once mined, bitcoins can be stored in an online wallet, traded on an online exchange, or used to buy goods and services.

“I was on holiday with my family when we heard about XBT, I flew to Stockholm the next day and stayed there for seven days,” said Masters.

Masters used to run the energy trading desk in the 1990s at JP Morgan, before striking on his own to co-found Global Advisors. The firm’s Bitcoin Investment Program was up 48 percent so far this year.

The addition of the ETNs lifted Global Advisors’ assets under management to $20 million.

Trading in the two ETNs were suspended for two weeks after KnC filed for bankruptcy, and both resumed market activity on Tuesday.

On the Nasdaq OMX Nordic Exchange, Bitcoin Tracker One and Bitcoin Tracker Euro were two of the biggest advancers on Tuesday, rising 42.78 percent and 43.89 percent respectively.

Bitcoin hit $725 on Monday BTC=BTSP, boosted by Chinese demand. By midday on Tuesday, it was at $675.42, down 4.1 percent on the day.

Reporting by Gertrude Chavez-Dreyfuss; Editing by David Gregorio