Europe Readies for Its First Bitcoin Spot ETF, Outpacing U.S. Efforts

• Europe is preparing to launch its first Bitcoin Spot ETF under Jacobi Asset Management.
• This advancement, utilising Guernsey’s non-EU status for regulatory flexibility, positions Europe ahead of the U.S. in the ETF arena.

Europe is poised to herald a major stride in cryptocurrency investment with the imminent launch of its first Exchange-Traded Fund (ETF) based on Bitcoin Spot price, courtesy of Jacobi Asset Management. To date, European Bitcoin investors have only had access to Exchange Traded Products (ETPs), structured as Exchange Traded Notes (ETNs) or Exchange Traded Commodities (ETCs). Unlike the U.S., single underlying asset ETFs are generally not feasible within the European Union, necessitating the detour through alternatively structured ETPs.

Regulatory Prowess: Guernsey’s Edge in Bitcoin ETF

Jacobi registered the product in Guernsey, leveraging the island’s non-EU status for regulatory nimbleness in obtaining fund approval. David Crosland, a partner at offshore law firm Carey Olsen, told Ignites Europe,

“Being a specialised fund management area, not subject to the inherent inflexibilities of EU membership, Guernsey was able to swiftly adapt and support this launch.”

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In contrast to ETNs, Jacobi’s ETF cannot be leveraged or employ derivatives, averting a potential “significant counterparty risk”. Originally planned for a July 2022 debut, the launch was delayed amidst market uncertainties sparked by Terra Luna and FTX. Jacobi indicated to the Financial Times that they are now ready to roll out the ETF this month, observing a shift in market demand “since last summer”.

While Europe gears up for this ground-breaking milestone, a host of financial service providers in the U.S., including BlackRock – the world’s largest asset manager – are seeking approval for a Bitcoin Spot ETF from the U.S. Securities and Exchange Commission (SEC). The escalating institutional interest in Bitcoin sends a positive signal to the market. The industry is hopeful that the approval of a U.S. ETF would significantly bolster the crypto domain.