After facing a year-long delay, Europe’s first spot Bitcoin exchange-traded fund (ETF) is finally set to make its debut later this year. The Bitcoin ETF, created by London-based multi-asset investment platform Jacobi Asset Management, was originally scheduled to launch on the Euronext Amsterdam Exchange under the ticker BCOIN in July 2022.
However, unforeseen market conditions, including the collapse of the Terra-Luna ecosystem in May and the FTX collapse in November of last year, led Jacobi Asset Management to postpone the listing. Despite the setbacks, the Jacobi Bitcoin ETF received approval from the Guernsey Financial Services Commission (GFSC) in October 2021 to launch its Bitcoin ETF.
According to Jacobi Asset Management, they have decided to move forward with the ETF launch now due to a gradual shift in demand compared to last summer. While an exact date has not been shared, the asset manager is currently assessing the launch and will announce it soon.
The Jacobi Bitcoin ETF is unique in that it is a centrally cleared crypto-backed financial instrument with custody supported by Fidelity Digital Assets. This marks a significant departure from the usual exchange-traded notes (ETNs) that are prevalent in Europe. Unlike ETNs, where investors own debt securities, ETF shareholders actually own a portion of the fund’s underlying assets. Additionally, ETFs cannot be leveraged or use derivatives, reducing the risk of market manipulation.
In Europe, the approval of the first spot Bitcoin ETF in October 2021 contrasted with the United States Securities and Exchange Commission’s (SEC) repeated rejection of all spot Bitcoin ETFs. However, in 2023, several institutional giants including BlackRock and Fidelity have filed fresh spot Bitcoin ETF applications in hopes of becoming the first SEC-approved spot BTC ETF. The SEC has already approved a couple of futures Bitcoin ETFs in 2021.
This development highlights the growing interest and demand for regulated Bitcoin investment products in both Europe and the United States. While the ETF market in Europe is evolving with the introduction of the Jacobi Bitcoin ETF, the U.S. market is eagerly awaiting the approval of a spot Bitcoin ETF.
The launch of the Jacobi Bitcoin ETF could potentially pave the way for more mainstream adoption of cryptocurrencies and further integration of digital assets into traditional investment portfolios. With the participation of major financial institutions and the establishment of regulatory frameworks, Bitcoin ETFs offer investors a regulated and accessible avenue to gain exposure to the cryptocurrency market.
As the crypto industry continues to mature, the introduction of more Bitcoin ETFs around the world could provide a boost to market liquidity and stability. It would also offer investors a regulated and secure means of investing in Bitcoin without the need to directly hold or manage cryptocurrencies.
Overall, the delayed launch of Europe’s first spot Bitcoin ETF signifies the increasing interest in cryptocurrency investment products and the determination of asset managers to navigate the complex regulatory landscape. As the crypto market progresses, the debut of the Jacobi Bitcoin ETF could mark a significant milestone in bridging the gap between traditional finance and the digital asset ecosystem.