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Europe’s highly anticipated and long-delayed spot Bitcoin exchange-traded fund (ETF) is finally set to debut later this year amidst huge anticipation surrounding its imminent arrival.
The launch comes at a time when anticipation in the United States for a spot Bitcoin ETF is building following BlackRock’s filing.
A Long Delay
The Bitcoin ETF, filed by the London-based multi-asset investment platform Jacobi Asset Management, was originally set to debut on the Euronext Amsterdam Exchange in July 2022. However, the launch was delayed due to unprecedented market conditions triggered by the spectacular collapse of the Terra ecosystem in May and the collapse of FTX in November. Both events created turmoil in the markets, forcing Jacobi Asset Management to delay the listing. The ETF had received approval from the Guernsey Financial Services Commission (GFSC) to launch as far back as October 2021.
The delay in launch has only served to heighten market expectations as investors eagerly await an avenue to tap into the Bitcoin market with the security of an ETF structure. Many believe the launch of a European ETF could usher in a new era for Bitcoin in European markets. The spot Bitcoin ETF will allow investors to gain exposure to Bitcoin without owning the underlying asset.
A Shift In Demand
The multi-asset investment platform explained that it had decided to launch the spot Bitcoin ETF now because of a gradual shift in demand compared to 2022. Additionally, it added that it is still assessing its launch strategy and would be announcing a launch date soon. The Jacobi spot Bitcoin ETF is a centrally cleared, crypto-backed financial instrument, the custody of which is supported by Fidelity Digital Assets.
The ETF marks a significant shift away from exchange-traded notes (ETNs). Europe has typically structured all crypto-backed financial instruments as exchange-traded notes rather than funds. The key difference between exchange-traded notes and exchange-traded funds is that ETN investors own debt security, while ETF shareholders own a part of the fund’s underlying assets.
Gensler And SEC Look To Play Spoilsport
While European markets are readying themselves for the region’s first spot Bitcoin ETF, the United States is lagging far behind. The United States Securities and Exchange Commission (SEC) has so far rejected all spot Bitcoin ETFs. However, US markets have registered a surge of interest in spot Bitcoin ETFs following BlackRock’s recent filing. BlackRock is arguably one of the biggest asset management firms in the world, and its filing could indicate a shift in sentiment and perception of Bitcoin.
In fact, 2023 has seen some of the biggest institutional giants, including Fidelity, file fresh spot Bitcoin ETF applications as the race to become the first US-approved spot Bitcoin ETF gathers steam. The Securities and Exchange Commission had already approved Bitcoin futures ETFs in 2021.
US markets were optimistic following the BlackRock filing, the Securities and Exchange Commission under Gary Gensler has decided to toe an all too familiar line by rejecting all ETF filings. According to the SEC, the spot Bitcoin filings were inadequate, hence the rejection. However, BlackRock has refiled its application for its iShares Bitcoin Trust exchange-traded fund. According to the new submission, Nasdaq has entered into a surveillance-share agreement with Coinbase, which addresses one of the main objections raised by the SEC.
Following BlackRock’s amendments, other firms such as Fidelity, WisdomTree, and Invesco will also be updating their ETF filings.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.