Jacobi Asset Management has launched the first Bitcoin ETF in Europe
In July 2023, a bitcoin-ETF appeared in Europe, which was a landmark event for the local market. The fact is that, until now, digital asset-related products have only been represented here by exchange-traded notes and not in the form of funds.
Jacobi Asset has launched the Bitcoin ETF. The main objective is to provide the local market with an ETF format rather than exchange-traded notes. The original plan was for the product to be available on the Euronext Amsterdam exchange in the summer of 2022. However, the company’s management decided to delay the launch. The postponement was due to concerns about the instability of the Terra Luna cryptocurrency, which crashed as a result. There were also concerns over the FTX exchange scandal, which led to the collapse of the entire market.
According to Jacobi’s representatives, one of the main aims of bringing the digital instrument to the European market is to dispel the stereotypes surrounding ETFs. Many issuers of this product use the term incorrectly. They are trying to hide the risks involved in buying and investing in ETFs.
Differences between ETFs and ETNs
Jacobi notes that transactions with their Bitcoin ETF do not involve the use of derivatives. In addition, there is no leverage, as with ETNs. Differences in digital products:
ETFs are investment funds with which it is possible to carry out operations similar to shares on a traditional stock exchange. At the same time, the instrument’s shareholders may own a certain proportion of the fund’s underlying assets.
ETNs belong to the group of debt instruments that allow you to track the price of the underlying asset. In this case, the underlying asset is a digital currency. Shareholders do not own the underlying asset.
Based on information from David Crosland of the law firm Carey Olsen, the authorisation of the ETF took place in Guernsey. This jurisdiction is famous for its loyal attitude towards digital products, including the registration of a Bitcoin fund.
Advantages of Europe’s crypto market
Europe’s first Bitcoin ETF has been in operation since 2021. The European market has outperformed the US market in this respect. The US SEC has yet to come to an agreement on how to regulate Bitcoin funds and has so far rejected all applications. However, this is not stopping several companies, such as BlackRock and Fidelity, from resubmitting applications to the US regulator. Experts note that the ability to launch ETFs in the US market will open up new opportunities for institutional investors. They will be able to trade digital assets in the local market much more easily. In addition, the funds will give new impetus to the development of Bitcoin itself.