Europe’s First Bitcoin Spot ETF Will Launch Soon

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Crypto asset manager Jacobi Asset Management is gearing up to launch the first spot Bitcoin exchange-traded fund (ETF) in Europe after the Terra Luna crash and FTX meltdown caused a long delay.

The open-end fund will provide exposure to the underlying performance of Bitcoin without directly managing the assets. The exchange-traded fund is open to qualified investors only and has a minimum subscription fee of $100,000.

Originally scheduled to list on the Euronext Amsterdam stock exchange in July 2022, under the symbol BCOIN, the launch was postponed due to unprecedented market conditions.

Jacobi Asset Management has now decided to go ahead with the launch of the ETF, citing a gradual change in demand from the previous year. The asset manager, which received approval from the Guernsey Financial Services Commission (GFSC) in October 2021, is currently evaluating the launch and is expected to announce a specific date soon.

What sets the Jacobi Bitcoin ETF apart is that it is a centrally cleared crypto financial instrument, with custodial support provided by Fidelity Digital Assets. This marks a change from the usual exchange-traded note (ETN) structure for traditional crypto-based financial instruments in Europe.

ETF shareholders hold direct ownership of a portion of the fund’s underlying assets, which may include securities, commodities or other financial instruments. On the other hand, ETN investors hold a debt security issued by the issuer, with returns usually tied to the performance of a specific index or asset.

Another distinction concerns leverage and the use of derivatives. ETFs generally do not use leverage or derivatives extensively, as this could introduce risks of market manipulation. ETNs, however, can incorporate leverage or derivatives into their structures, which can expose investors to additional risks and complexities.

Jacobi Asset Management has chosen to register its Bitcoin ETF product in Guernsey, a British dependency and crown island. This gave European regulators more flexibility in approving the fund. However, Guernsey’s regulatory framework includes specific laws that prohibit traders from using Jacobi’s ETF in leveraged or derivatives trading activities.

Fidelitys cryptocurrency investment arm will hold custody of the ETF, which Jacobi plans to list on Cboe Europe, subject to Financial Conduct Authority (FCA) approval. While Fidelity Digital Assets continues to focus solely on institutional clients, this is one of the first custodial service agreements the fund manager has made public.

Jacobi Asset Management launched operations in May 2021 and is led by former Goldman Sachs investment banker Jamie Khurshid.

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