July 2022 was set to be a landmark month for the crypto industry in Europe. Jacobi Asset Management announced the launch of Europe’s first Bitcoin ETF on Euronext Amsterdam under the ticker BCOIN. However, the launch failed to transpire. Now, after a 12-month delay, the investment vehicle is expected to finally go live this month.
A recent Financial Times report revealed that the asset manager affirmed that the fund is “on track” to launch in July 2023. The firm stepped aside last year because “the time wasn’t right,” as the ecosystem was suffering from the collapse of entities like Three Arrows Capital, Terraform Labs, FTX, etc. The asset manager pointed out that “demand has shifted since last summer.”
Jacobi’s Bitcoin ETF will provide investors with exposure to Bitcoin through a well-established investment structure. Having said that, there are other crypto-equity-related ETFs that have already been launched in Europe. Recently, Melanion Capital launched its Bitcoin Equities ETF. Rather than deriving value directly from Bitcoin’s performance, this ETF tracks the performance of several companies that are involved with crypto. The fund is tracking stocks with investments in mining operations, Bitcoin holdings, and exchanges. Prominent names include MicroStrategy, Coinbase, and Robinhood. Other mining firms like Marathon Digital, Riot, and Hut8 are also a part of the firm’s stock index.
Also Read: Bitcoin Equities ETF Tracking Coinbase, MicroStrategy Launched in Netherlands
Jacobi’s Bitcoin ETF can’t be ‘leveraged’ or use ‘derivatives’
The Financial Times’ report pointed out that in Europe, all digital assets exchange-traded products are usually structured as exchange-traded notes, instead of funds. For context, each ETF shareholder owns a portion of a fund’s shares. Contrarily, ETN investors own debt security, rather than the assets. In 2022, Jacobi’s Co-Founder and Chief Operating Officer, Peter Lane, pointed out how note issuers were guilty of misusing the ETF term. He highlighted,
“There has been so much misinformation and misuse of the term ETF by [ETN] issuers, presumably to obfuscate the risks that are inherent in acquiring and investing in ETNs.”
Jacobi has clarified that it is launching an ETF, not an ETN. The asset manager’s investment vehicle cannot use derivatives, or be leveraged. This would help in eliminating the counter-party risk.
Also Read: Bitcoin May Aid MicroStrategy Shares to Cross $500