Europe's first Bitcoin Index Equity Fund (ETF) is expected to be listed this month. It has been delayed for a full year from the date when this fund was originally planned to be listed.
Asset management company Jacobi originally announced that the Bitcoin ETF would be listed on Euronext Amsterdam in July 2022. However, the cryptocurrency market was turbulent last year. First, Terra collapsed, and then FTX declared bankruptcy. Therefore, it has been difficult to find a suitable time to go public, so it has been delayed so far. The fund is now expected to be launched this month.
"Demand has changed since last summer," the asset manager said.
In Europe, all digital asset exchange-traded products (ETPs) are structured as index investment securities (Exchange Traded Notes, ETNs) rather than index stock funds (ETFs). Stock holders in each ETF own a portion of the fund's underlying stock, while investors in ETNs own debt securities rather than the underlying assets.
Jacobi has stated that the company is launching a Bitcoin ETF, not an ETN. Jacobi co-founder and chief operating officer Peter Lane said last year that structured note issuers were guilty of "misusing" the term ETF.
Peter Lane said: "There is a lot of misinformation and misuse of the term ETF by ETN issuers, presumably to confuse the risks inherent in buying and investing in ETNs." Jacobi said the difference between ETFs and ETNs is that ETFs cannot be leveraged or derivatives, failure to do so may result in "significant counterparty risk."
David Crosland, a partner at the offshore law firm Carey Olsen appointed by Jacobi, said the fund has already assisted the launch of a Bitcoin fund in Guernsey, a jurisdiction that offers many advantages. David Crosland said: “Guernsey’s flexibility and willingness to understand complex details allows sponsors to launch a fund vehicle that benefits from regulated fund status when other European jurisdictions are unable to do so.”
Michael O'Riordan, founding partner of ETF and digital asset advisory firm Blackwater Search and Advisory, said the regulatory challenges of launching a Bitcoin ETF in Europe are "very large" because Bitcoin cannot be regulated under the EU's Collective Investment Commitment on Transferable Securities. Considered a qualifying asset.
He said: "Actually, apart from some structural differences, ETFs and ETPs are very similar. However, as an industry, we do not do a good enough job of distinguishing the two, which often causes great confusion in the market. Confused."
According to data from Coinbase and Bloomberg, net flows into European digital asset ETPs reached $483 million in the past 18 months, including $398 million in Q3 2022 alone.
According to Ignites Europe's analysis of data from fund data provider Morningstar, the asset size of European digital asset ETPs reached 4.3 billion euros, reaching a peak of 10.5 billion euros at the end of 2021.
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