Europe has surpassed the United States in the launch of the first Bitcoin exchange-traded fund (ETF), with London-based Jacobi Asset Management announcing the product’s debut on Euronext Amsterdam today.
The firm initially expected to launch its Bitcoin ETF product last year after getting authorization from the Guernsey Financial Services Commission (GFSC) in October 2021.
Europe beats the US in launching a BTC ETF
As previously reported, the offering was billed as the first spot or physical-backed Bitcoin fund, giving investors access to a financial asset that is physically backed by BTC.
Jacobi, on the other hand, opted to postpone the launch, citing the Terra ecosystem’s collapse and the bankruptcy of the FTX crypto market as reasons. The Jacobi FT Wilshire Bitcoin ETF went online today.
The Guernsey Financial Services Commission (GFSC) will regulate the Jacobi FT Wilshere Bitcoin ETF, which will trade under the ticker “BCOIN.” Fidelity Digital Assets provides custody for the fund, and Flow Traders acts as a market maker, Jacobi revealed on Tuesday.
The asset management firm also emphasized the fund’s environmentally and socially responsible nature, having added a renewable energy certificate (REC) to the ETF.
The fund uses external data to calculate the Bitcoin network’s energy consumption and then purchases and retires the RECs. The RECs are also recorded on a blockchain service, which will allow investors to verify the fund’s eco-friendly claims.
The Jacobi FT Wilshire Bitcoin ETF is also touted as the first decarbonized digital asset fund compliant with Article 8 of the European Sustainable Finance Disclosure Regulation (SFDR), which applies to funds with environmental and social goals.
The company partnered with digital asset platform Zumo to implement a verifiable built-in Renewable Energy Certificate (REC) solution, which allows institutional investors to trade Bitcoin while also meeting their Environmental, Social, and Governance (ESG) goals.
This makes RECs an ideal tool to use for crypto, where the most material part of the carbon footprint relates to electricity consumption […] Furthermore, the use of RECs is recognized under the Greenhouse Gas Protocol as a Market-Based accounting method and can be used to claim full decarbonization, whereas the same claim cannot be used for offsets.
Jacobi CEO Martin Bednall
BCOIN uses the FT Wilshire Bitcoin Blended Price Index to access real-time average Bitcoin price data from several crypto exchanges. The spot ETF allows investors to have exposure to the Bitcoin market without having direct ownership or custody of the underlying asset.
In Europe, exchange-traded notes (ETNs), also known as exchange-traded products (ETPs), are prevalent; however, Jacobi’s offering is the first ETF.
ETF investors possess a portion of the underlying shares, whereas ETN investors hold debt security. In contrast to ETNs, Jacobi has stated that its ETF cannot use leverage or derivatives.
Jacobi and the future of Bitcoin ETFs
Europe has reached a significant milestone with the launch of the spot Bitcoin ETF, while the United States has yet to approve a number of similar spot Bitcoin ETF applications from major asset managers such as BlackRock and Fidelity.
Nonetheless, there is renewed optimism that the regulator will approve a spot bitcoin fund, as asset management behemoth BlackRock (BLK) has led a flurry of new applications with “surveillance-sharing” agreements designed to prevent market manipulation.
A statement by Martin Bednall, chief executive officer of Jacobi, highlighted the continent’s progressive attitude towards crypto investment products as a possible catalyst for increased adoption.
It is exciting to see Europe moving ahead of the US in opening up Bitcoin investing for institutional investors who want safe, secure access to the benefits of digital assets using familiar and regulated structures like our ETF.
Jacobi CEO Martin Bednall
The launch of Jacobi Bitcoin ETF follows the June 2023 debut of Melanion Capital’s Bitcoin Equities ETF on the Euronext Amsterdam exchange. The ETF is designed to monitor the Melanion Bitcoin Exposure Index, a custom basket of European and American stocks that is highly correlated to the market price of Bitcoin.
This differs from the spot ETF in that investors gain exposure to a fund constituted of stocks of companies with significant Bitcoin holdings, crypto exchanges, and mining operations.
This includes companies like MicroStrategy, which holds over 140,000 BTC, as well as Riot, Marathon Digital, and Hut8, which are all significant Bitcoin mining companies.
