Breaking news: Major Bitcoin ETN secretly sold all its bitcoin cash.

XBT Provider AB (Publ) which issues the Bitcoin XBT Exchange Traded Note, (ETN), made an announcement on their website yesterday.

The ETN is quoted in SEK and EUR and is designed to track the price of bitcoin, less fees.

It seems that they secretly sold their holdings of Bitcoin cash (BCH).

The ETN received the bitcoin cash tokens free of charge as a result of the bitcoin hard fork which took place on 1st August 2017.

At the time of the fork, the ETN announced that, whilst it had no legal obligation to provide investors with any of the value created by the BCH tokens, it would nevertheless consider options to do so, after a three month “observation period”, ending on 1st November 2017. They did not elaborate on how they would provide value to investors. There was no indication that they would use the three month period to sell the BCH tokens. They had originally said that the plan would be announced after 1st November 2017. Many investors had assumed they may distribute the BCH in the form of a new ETN.

Yesterday they announced that they have been selling the BCH. The proceeds, after expenses, will be distributed to those investors who were holding the ETN at the start of business on 1st August 2017.

In the announcement, the ETN did not disclose at what prices the BCH were sold, nor the actual dates of sale. The number of BCH tokens sold was not disclosed. The price of BCH has been falling since it was issued. Investors must be hoping that some of the sales were conducted at higher prices.

The ongoing selling of BCH by this ETN may have contributed to the fall in price of BCH. The price of BCH has fallen from a peak of over $900 to $330 since August.

It is expected that details of the amount and date of the distribution will be announced shortly after 1st November 2017.

It is just as well that the BCH were sold secretly. Had the market known that a major investor was dumping its coins, people would have held off purchasing until the overhang had been removed.

The following is an extract of the announcement on the ETN’s website:

link to the announcement
“Following detailed discussions during the "observation period" with various settlement and clearing third-party service providers and key structured products advisors, the Board of the Issuer has concluded that the most appropriate action to take to give effect to the aforementioned policy position is to implement a cash distribution plan for those investors holding the Issuer's Certificates at the opening of trading on August 1st. To prepare for the implementation of this distribution plan, the Guarantor and its affiliate companies have been divesting themselves of BCH, whenever it has been possible using existing liquidity pools and exchanges that offered BCH to their venues. The proceeds yielded therefrom, less the costs of implementing and administering the distribution plan, will be available for remittance for the benefit of the holders of the Issuer's Certificates at the opening of trading on August 1st. Individuals and / or brokers may be required to provide additional identification / 'know your customer' information in order to be able to receive a distribution.

The Issuer will provide further details in connection with the proposed distribution plan, by way of a supplement Press Release, shortly after the 3 month "observation period" has ended on November 2nd.”

“