Europe’s First Bitcoin ETF Set to Launch After Year-Long Delay
The long-awaited bitcoin exchange-traded fund (ETF) in Europe is finally set to be listed by the end of this month, according to the Financial Times. After a delay of a year, Jacobi Asset Management is preparing to publicly launch the ETF, which was initially announced in July 2022. The good news is that demand for the ETF has increased, and it is now on track for its anticipated launch.
Key Points:
– Previous Attempts: Previous exchange-traded products (ETPs) in Europe based on digital assets have been structured as exchange-traded notes (ETNs), not funds. Jacobi is specifically launching an ETF, which means investors will own a portion of the fund’s underlying asset, rather than a debt security.
– No Leverage or Derivatives: Unlike ETNs, Jacobi’s bitcoin ETF cannot be leveraged or use derivatives. This mitigates the significant counterparty risk that comes with leveraging and derivatives.
– Authorization in Guernsey: The ETF has been authorized in Guernsey, a jurisdiction outside the EU. This allows for more flexibility in launching the ETF, as it is not subject to the regulatory challenges of being an EU member.
– Regulatory Challenges: Launching a bitcoin ETF in Europe has faced regulatory challenges due to bitcoin not being considered an eligible asset under the EU’s Ucits Directive. However, the authorization in Guernsey bypasses these challenges.
– Growing Interest: European digital-asset ETPs have seen significant growth in net flows and assets. Over the past 18 months, net flows into these ETPs have reached $483 million, with assets totaling €4.3 billion ($4.8 billion).
Hot Take: The launch of Europe’s first bitcoin ETF is a significant development for the crypto market. It provides European investors with a regulated and accessible way to invest in bitcoin. The authorization in Guernsey demonstrates the innovative solutions being implemented to navigate regulatory challenges. With growing interest in digital-asset ETPs, the launch of this ETF could further drive adoption and mainstream acceptance of cryptocurrencies in Europe.
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