Jacobi Asset Management will launch the first Bitcoin exchange-traded fund (ETF) in Europe after a delay caused by the Terra Luna crash.
Jacobi has emphasized that theirs is the first European Bitcoin ETF that exposes investors to actual shares.
New Jacobi Product Bypasses Strict Asset Rules
Until now, European Bitcoin “funds” granted shareholders a debt security rather than a portion of the fund’s underlying shares. The former are known as exchange-traded notes (ETNs) rather than funds.
Jacobi registered the product in Guernsey, whose non-European Union status allowed regulators flexibility in approving the fund. Guernsey’s laws forbid traders to use Jacobi’s ETF in leveraged or derivative trading.
ETFs enabled holders to diversify their exposure to various asset classes. EU guidelines do not recognize Bitcoin as an asset class eligible for inclusion in an ETP.
According to Coinbase and Bloomberg, net inflows into European exchange-traded products (ETPs) totaled $483 million in the last 18 months.
Investments in European ETPs currently stand at $4.8 million.
Bitcoin Futures Approved Before Spot in US
Last month, the US Securities and Exchange Commission (SEC) blocked early Bitcoin spot ETF applications for market manipulation concerns. It said recent applications by big investment firms BlackRock and Fidelity needed more satisfactory market surveillance.
Several firms have since refiled, citing recently-struck market surveillance sharing agreements—however, the approval of a US Bitcoin spot ETF is pending.
In the meantime, several Bitcoin futures products from ProShares, VanEck, and Valkyrie already trade on the New York Stock Exchange, Chicago Mercantile Exchange, and the Nasdaq.
Several years ago, Grayscale Investments launched a product resembling a Bitcoin ETF to give institutions access to the asset. Since then, shares of its Grayscale Bitcoin Trust have been trading at a discount to the underlying Bitcoin since last year, prompting the company to apply to convert the product into an ETF.
The SEC rejected Grayscale’s application, prompting the company to sue the agency. Litigation is ongoing.
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