Definition ∞ Crypto Exchange-Traded Notes (ETNs) are unsecured debt instruments issued by financial institutions that track the performance of one or more cryptocurrencies. Unlike ETFs, ETNs do not hold the underlying assets but promise to pay returns based on the performance of the specified digital asset index. They trade on traditional exchanges, offering investors exposure to crypto price movements without direct asset ownership. Investors bear the credit risk of the issuer in addition to market risk.
Context ∞ Crypto Exchange-Traded Notes present an alternative for investors seeking digital asset exposure within traditional financial markets, distinct from ETFs due to their debt structure. Discussions often focus on the issuer’s creditworthiness and the potential for tracking errors compared to direct asset holdings. Monitoring the regulatory stance on these debt instruments will provide important insights into how jurisdictions approach synthetic crypto exposures.
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