Crypto ETPs in Europe
European crypto enthusiasts are observing with envy as the US Securities and Exchange Commission (SEC) approves spot bitcoin exchange-traded funds (ETFs), while Europe already has a range of exchange-traded products (ETPs) available. These ETPs have been providing retail investors with exposure to crypto for quite some time, making Europe more progressive in terms of cryptocurrency products. Sweden’s XBT Provider AB was the first to introduce a Bitcoin-based security on a regulated exchange back in 2015.
Main Providers
Europe is home to several key players in the ETP market, including 21Shares, CoinShares, WisdomTree, VanEck, Valour, Invesco, Hashdex, and ETC Group. However, due to regulatory obstacles, it is unlikely that a Bitcoin ETF will be listed in Europe. Under UCITS laws in Europe, an ETF is defined as a basket of stocks that offers diversification with no single component having more than a 20% allocation.
Crypto ETF and ETP Flows
On their first day of trading, spot bitcoin ETFs in the US generated over $4 billion in trading volumes. BlackRock’s product accounted for approximately a quarter of the volumes, while the Grayscale Bitcoin Trust (GBTC) converted into an ETF saw almost half the volumes. Bloomberg Intelligence analyst Eric Balchunas noted that there were 700,000 individual trades on the first day of trading for the 11 spot ETFs. This grassroots action reflects strong interest from retail investors.
ETPs and ETFs Listed Globally Gain Momentum
Globally, crypto ETFs and ETPs have experienced a significant increase of 119.6% in the first 11 months of 2023, according to ETFGI. In November last year, these products gathered net inflows of $1.31 billion, bringing the year-to-date net inflows to $1.60 billion. In Europe, Germany and Switzerland saw inflows of $663 million and $434 million in 2023, respectively, accounting for a significant portion of assets under management (AUM).
Hot Take: Crypto Products for European Investors Experiencing ETF FOMO
European crypto investors may be feeling a sense of FOMO as they watch the US SEC approve spot bitcoin ETFs. However, it’s important to note that Europe already has a range of exchange-traded products (ETPs) available for retail investors. These ETPs have been providing exposure to crypto for a while now, making Europe more progressive in terms of cryptocurrency products. While a Bitcoin ETF listing in Europe is unlikely due to regulatory hurdles, the region continues to see strong inflows into ETPs. The momentum for crypto ETPs and ETFs globally is on the rise, with significant increases in trading volumes and net inflows.”
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