Bitcoin: What is this new product offered by Boursobank which allows you to invest in crypto?

Boursobank now offers its customers to invest in cryptoactives. To expose themselves to Bitcoin, Ethereum or Solana, investors will have to go through a financial product called ETN. Explanations.

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– How to invest in crypto via your bank?

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A French bank will offer cryptos to its customers: information has been making the titles since the announcement, Tuesday, March 25, by Boursobank – Société Générale’s subsidiary – of its new investment offer in cryptoactives. In fact, it is not the first establishment with a banking license to offer to invest in these digital assets, since this is already possible on N26 or Trade Republic. Above all, “We do not offer the possibility of buying bitcoin, for example, but one and one with a bitcoin underlying”, Specifies Xavier Prin, commercial and communication director of Boursobank.

So what is it exactly? Customers of the first online bank online in France now have the possibility, via their securities account, of investing in five different cryptocurrencies, with financial instruments called “ETN” (for “Exchange traded notes”, or titles of debt negotiated on the stock market), distributed by Coinshares and Blackrock. You may be more familiar with another type of similar financial product: ETFs, or “trackers”, which make it possible to reply the performance of large asset categories (stocks, bonds, gold, etc.).

There is no crypto etf in Europe

Here, the principle is similar: you do not directly hold Bitcoin or Ethereum, but a financial product that will follow their course, upwards and downwards. And this for a simple reason: “Today, there is no ETF with crypto underlying”explains Xavier Prin. In reality, they have been well recently, but across the Atlantic only, where a first ETF backed by Bitcoin was approved in January 2024. An innovation for the time being impossible in Europe, because the regulations prohibit that an ETF is composed of a single asset, as would be the case with an ETF that would only follow the price of Bitcoin, for example.

Hence the passage through the category of “ETN”. Distinction that does not exist in the United States, “Where everything enters the category of ETFs, without distinction of the underlying asset class (stock market indices, raw material, cryptos, etc., editor’s note)”explains Alexis Boeglin, crypto expert of the crypcool broker. But in addition to this European subtlety, invest in crypto via an etN changes something in relation to buying and having cryptoactives directly?

Guaranteed funds up to 70,000 euros in the event of bankruptcy

The answer is yes. First of all, “You lose the ability to use crypto as a means of payment”underlines Alexis Boeglin. It is also impossible to exchange a crypto for another, an operation called “Swap”. But being a simple investor and not a holder has a major advantage: passing by an ETN transmitter recorded by the Autorité des Marchés Financiers (AMF), as are Coinshares and Blackrock, “You also benefit from the warranty up to 70,000 euros per establishment and by customer of your securities”Xavier prin point. In other words, if the issuers who hold these cryptoactives for you came to go bankrupt, “The deposit and resolution guarantee fund (FGDR) compensates the loss of your securities up to 70,000 euros”, Recalls the AMF on its site. A guarantee that does not apply if the course of a crypto falls, but the transmitter remains standing!