First Spot Bitcoin ETF is Set to Launch in Europe

After a year since its intended launch, Europe’s first spot bitcoin ETF exchange traded fund (ETF) is preparing to make its highly awaited debut with a public listing this month.

Initially slated for listing on Euronext Amsterdam in July 2022, the bitcoin ETF by Jacobi Asset Management is now expected to be launched this month, as the company affirms that it is progressing as scheduled. The decision to postpone its launch last year was prompted by unfavorable circumstances, such as the Terra Luna cryptocurrency crash in May 2022 and the subsequent collapse of crypto exchange FTX in November.

According to the asset manager, the current launch timing aligns with the evolving demand, as market conditions have evolved since the summer of last year.

Until now, European digital asset exchange traded products have primarily taken the form of exchange traded notes (ETNs) rather than traditional funds.

The key distinction lies in the ownership structure: ETF shareholders possess a fractional ownership in the underlying shares of a fund, whereas ETN investors hold a debt security that does not grant them direct ownership of the underlying assets.

Jacobi Asset Management has emphasized the significance of their decision to launch an ETF rather than an exchange traded note, highlighting the unique nature of their offering in the market.

Co-founder and COO of Jacobi Peter Lane, said- “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 Asset Management emphasized that their ETF is distinct from ETNs as it eliminates the possibility of leverage or derivative usage, which mitigates the potential for “significant counterparty risk.”

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According to data sourced from Coinbase and Bloomberg, net inflows into European digital assets exchange traded products (ETPs) totaled $483 million over the past 18 months, with a noteworthy inflow of $398 million occurring solely in the third quarter of 2022.

Analysts at Ignites Europe, analyzing Morningstar data, have determined that the assets held in European digital assets ETPs currently amount to €4.3 billion. This figure marks a decrease from the peak of €10.5 billion recorded at the conclusion of 2021.