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Bitcoin ETFs expand out of U.S., find root in…

  • Jacobi Asset Management, headquartered in London, first announced its plans to launch the Bitcoin ETF in July 2022.
  • But the company shelved its plans due to last year’s disastrous crypto failures.

In an extraordinary development, Europe’s first Bitcoin [BTC] exchange-traded fund (ETF) is set to launch this month.

According to a recent Financial Times report, Jacobi Asset Management will soon list its Bitcoin ETF publicly on the Euronext Amsterdam stock exchange.

The asset management firm, headquartered in London, received regulatory approval from the Guernsey Financial Services Commission (GFSC) for its ETF in October 2021. It announced its plans to launch the ETF on the Euronext Amsterdam exchange in July 2022.

However, the firm did not launch the product last year. We can attribute the reasons for this one-year delay to multiple crypto failures in 2022.

Last year, we saw the collapse of the Terra [LUNA] ecosystem in May and that of the FTX crypto exchange in November.

According to experts, these disastrous events prompted Jacobi to proceed with caution in launching its Bitcoin ETF. It will be out soon with the BCOIN ticker.

The asset management firm is collaborating with Fidelity Digital Assets to offer asset custody services to its users. It is also partnering with Flow Traders and DRW to allow the trading of the ETF on the exchange.

Jacobi underlines the nature of its Bitcoin ETF

The report stresses upon a significant factor underlying the nature of Bitcoin.

So far, all digital assets exchange traded products in Europe have been structured as exchange traded notes (ETNs), rather than funds (ETFs).

ETF shareholders own a portion of a fund’s underlying shares. However, an ETN shareholder owns a portion of debt security, not the underlying asset itself.

The firm’s co-founder and Chief Operating Officer (COO) Peter Lane told Ignites Europe last year,

There has been so much misinformation and misuse of the term ETF by [ETN] issuers, presumably to obfuscate the risks that are inherent in acquiring and investing in ETNs.

Jacobi has strongly underlined the fact that the firm is launching a (Bitcoin) ETF, rather than an ETN. The firm stated that its ETF, unlike ETNs, cannot be leveraged or use derivatives, which could otherwise result in “significant counterparty risk.”

The state of Bitcoin ETFs in the U.S.

In the U.S., the U.S. Securities and Exchange Commission (SEC) recently approved the first leveraged Bitcoin futures ETF, namely the Volatility Shares 2x Bitcoin Strategy ETF (BITX).

Several major financial firms, including BlackRock, WisdomTree, Valkyrie, Invesco, et al. have applied for spot Bitcoin ETFs with the SEC recently. We are yet to see if the regulator will approve these applications.

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