Europe's First Bitcoin ETF: Launching After a Year-long Delay

Bombolo | News and Media

In July 2022, Europe's crypto industry was anticipating a significant milestone with the planned launch of Jacobi Asset Management's Bitcoin ETF on Euronext Amsterdam. However, the launch did not materialize as scheduled. Now, after a 12-month delay, the highly anticipated investment vehicle is expected to finally go live this month.

Also Read: Grayscale Challenges SEC's Rejection of Spot Bitcoin ETF

The Delay and Current Status

According to a recent report by the Financial Times, Jacobi Asset Management has affirmed that their Bitcoin ETF is "on track" to launch in July 2023. The decision to postpone the launch in the previous year was due to unfavorable market conditions, following the collapse of entities like Three Arrows Capital, Terraform Labs, and FTX. However, the asset manager noted that the demand for such investment products has shifted since then.

Jacobi's Bitcoin ETF: Providing Exposure to Bitcoin

Jacobi's Bitcoin ETF aims to offer investors exposure to Bitcoin through a well-established investment structure. It is important to note that several other crypto-equity-related ETFs have already been launched in Europe. For instance, Melanion Capital recently introduced its Bitcoin Equities ETF, which tracks the performance of companies involved in the crypto space. This ETF includes stocks of mining operations, Bitcoin holdings, and exchanges. Notable names such as MicroStrategy, Coinbase, and Robinhood are part of the fund's stock index, alongside mining firms like Marathon Digital, Riot, and Hut8.

Also Read: Bitcoin ETFs: Will They Revolutionize the Cryptocurrency Market?

ETF vs. ETN: Understanding the Difference

In Europe, digital assets exchange-traded products typically adopt the structure of exchange-traded notes (ETNs) rather than funds. While ETF shareholders own a portion of a fund's shares, ETN investors own debt securities instead of the underlying assets. Jacobi's Co-Founder and Chief Operating Officer, Peter Lane, criticized the misuse of the term ETF by note issuers, emphasizing the inherent risks associated with ETNs. To clarify, Jacobi states that it is launching an ETF, not an ETN, with the intention of eliminating counter-party risk by refraining from using derivatives or leverage in their investment vehicle.

After a delay in its initial launch, Jacobi Asset Management's Bitcoin ETF is set to make its debut in July 2023. This development comes as a response to the shifting demand for crypto-related investment products in Europe. Jacobi's ETF aims to provide investors with exposure to Bitcoin while adhering to a well-established investment structure and eliminating counter-party risk.

Also Read: Sealing the Future: The Importance of Approving a Spot Bitcoin ETF

FAQs

1. What is a Bitcoin ETF?

A Bitcoin ETF (Exchange-Traded Fund) is a type of investment vehicle that allows investors to gain exposure to Bitcoin without directly owning the cryptocurrency. It tracks the price performance of Bitcoin and is traded on regulated exchanges.

2. Are there other Bitcoin-related ETFs in Europe?

Yes, besides Jacobi's Bitcoin ETF, Melanion Capital has launched a Bitcoin Equities ETF that tracks the performance of companies involved in the crypto industry.

3. What is the difference between an ETF and an ETN?

An ETF (Exchange-Traded Fund) represents ownership of a fund's shares, while an ETN (Exchange-Traded Note) is a debt security. ETFs are generally considered less risky than ETNs.

4. Why was Jacobi's Bitcoin ETF delayed?

Jacobi Asset Management postponed the launch of their Bitcoin ETF in 2022 due to unfavorable market conditions following the collapse of several crypto entities. They deemed it necessary to wait for more favorable market conditions.

5. What is the benefit of launching an ETF instead of an ETN?

By launching an ETF instead of an ETN, Jacobi Asset Management aims to eliminate counter-party risk and provide investors with a more secure investment structure.