In this issue of the Bloomberg Crypto newsletter, Tanzeel Akhtar explains why a Bitcoin “first” failed to excite:
Europe finally has a Bitcoin ETF. But did it really need one?
By Tanzeel Akhtar
August 22, 2023 at 4:00 PM CDT
You're reading the Bloomberg Crypto newsletter.
Get exclusive coverage of the crypto universe delivered straight to your inbox twice a week.
In this issue of theBloomberg Cryptonewsletter,Tanzeel Akhtarexplains why a Bitcoin “first” failed to excite:
A big shrug
The topic that transfixed the crypto world this summer wasn’t some new invention, scandal or meme-coin rally (or wipeout). Rather, all eyes were on the SEC — and more precisely, whether the US securities regulator-turned-crypto bogeymanwould finally approvean exchange-traded fund tied to the spot price of Bitcoin. After all, one of the applicants was none other than themighty BlackRock.
The SEC appears to still be deliberating, but in the meantime someone else took advantage of the sudden hype around Bitcoin ETFs. London-basedJacobi Asset Management, led by BlackRock alumnus Martin Bednall, this month listed what it calls “Europe’s first spot Bitcoin ETF” on Euronext Amsterdam, a putative milestone that received decent media coverage.
Did Bednall just upstage his former employer? Well, maybe not. The regulator overseeing Jacobi’s product, Guernsey Financial Services Commission, doesn’t have quite the same heft as the SEC: It’s the securities watchdog of the English Channel island of Guernsey, which has a population of roughly64,000and isn’t part of the European Union.
Media coverage aside, some who watch the ETF industry for a livingreacted with a shrug. What, they asked, is the point of having the “first” Bitcoin ETF in Europe, if it was approved by a minor regulator outside the EU and there’s already more than a dozen similar existing products that get the job done — even if they’re not strictly called ETFs? (Most of them are called ETPs, short for exchange-traded products).
Source
JSeyff
But a more important question might be, how did investors react? Judging by the early results, the best answer seems to be that they didn’t, really. In the six trading sessions since the ETF (ticker BCOIN) listed, a total of just 4,409 units changed hands, according to data compiled by Bloomberg. TheETC Group Physical Bitcoinfund, traded in Germany (ticker BTCE), did more than 1.1 million in unit volume on Aug. 18 alone.
In an interview, Bednall downplayed the thin trading, saying the ETF isn’t targeted at retail traders and so lower volume is to be expected, at least initially. He expressed optimism that institutions will embrace BCOIN. As for choosing Guernsey as the regulatory domicile, Bednall described its regulator as “more proactive in terms of changing the rules.”
Even so, Jacobi’s ETF may be at a disadvantage to competing offerings in Europe because it’s not compliant with UCITS, a set of voluntary rules that many exchange-traded products follow. “As non-UCITS ETFs take relatively more effort than UCITS ETFs to be sold to end investors, the Jacobi Bitcoin ETF will thus have less distribution advantage even if it’s called an ETF,” says Bloomberg Intelligence analystHenry Jim.
A positive SEC decision on US Bitcoin ETFscould unleashhuge buying of the underlying asset (Bitcoin), and it’s seen by crypto watchers as a key signal of the regulator’s attitude towards crypto. It’s hard to say the same for Jacobi’s debut.
Charting it out
BNB Price Caves
The digital token created by Binance has slumped in value as the biggest crypto exchange faces pressure from regulators worldwide
Source: CoinGecko
Hearing them out
“We’re going to continue to build.”
Ivan Soto-Wright
CEO, Moonpay
The payments startup burst into the mainstream with a series of high-profile brand partnerships before slashing its internal valuation amid a slump in NFTs. Now it'sformed a tie-upwith embattled crypto exchange Binance.US
What we’re reading (and writing)
Europe finally has a Bitcoin ETF. But did it really need one?
By Tanzeel Akhtar
August 22, 2023 at 4:00 PM CDT
You're reading the Bloomberg Crypto newsletter.
Get exclusive coverage of the crypto universe delivered straight to your inbox twice a week.
In this issue of theBloomberg Cryptonewsletter,Tanzeel Akhtarexplains why a Bitcoin “first” failed to excite:
A big shrug
The topic that transfixed the crypto world this summer wasn’t some new invention, scandal or meme-coin rally (or wipeout). Rather, all eyes were on the SEC — and more precisely, whether the US securities regulator-turned-crypto bogeymanwould finally approvean exchange-traded fund tied to the spot price of Bitcoin. After all, one of the applicants was none other than themighty BlackRock.
The SEC appears to still be deliberating, but in the meantime someone else took advantage of the sudden hype around Bitcoin ETFs. London-basedJacobi Asset Management, led by BlackRock alumnus Martin Bednall, this month listed what it calls “Europe’s first spot Bitcoin ETF” on Euronext Amsterdam, a putative milestone that received decent media coverage.
Did Bednall just upstage his former employer? Well, maybe not. The regulator overseeing Jacobi’s product, Guernsey Financial Services Commission, doesn’t have quite the same heft as the SEC: It’s the securities watchdog of the English Channel island of Guernsey, which has a population of roughly64,000and isn’t part of the European Union.
Media coverage aside, some who watch the ETF industry for a livingreacted with a shrug. What, they asked, is the point of having the “first” Bitcoin ETF in Europe, if it was approved by a minor regulator outside the EU and there’s already more than a dozen similar existing products that get the job done — even if they’re not strictly called ETFs? (Most of them are called ETPs, short for exchange-traded products).
Source
JSeyffBut a more important question might be, how did investors react? Judging by the early results, the best answer seems to be that they didn’t, really. In the six trading sessions since the ETF (ticker BCOIN) listed, a total of just 4,409 units changed hands, according to data compiled by Bloomberg. TheETC Group Physical Bitcoinfund, traded in Germany (ticker BTCE), did more than 1.1 million in unit volume on Aug. 18 alone.
In an interview, Bednall downplayed the thin trading, saying the ETF isn’t targeted at retail traders and so lower volume is to be expected, at least initially. He expressed optimism that institutions will embrace BCOIN. As for choosing Guernsey as the regulatory domicile, Bednall described its regulator as “more proactive in terms of changing the rules.”
Even so, Jacobi’s ETF may be at a disadvantage to competing offerings in Europe because it’s not compliant with UCITS, a set of voluntary rules that many exchange-traded products follow. “As non-UCITS ETFs take relatively more effort than UCITS ETFs to be sold to end investors, the Jacobi Bitcoin ETF will thus have less distribution advantage even if it’s called an ETF,” says Bloomberg Intelligence analystHenry Jim.
A positive SEC decision on US Bitcoin ETFscould unleashhuge buying of the underlying asset (Bitcoin), and it’s seen by crypto watchers as a key signal of the regulator’s attitude towards crypto. It’s hard to say the same for Jacobi’s debut.
Charting it out
BNB Price Caves
The digital token created by Binance has slumped in value as the biggest crypto exchange faces pressure from regulators worldwide
Source: CoinGecko
Hearing them out
“We’re going to continue to build.”
Ivan Soto-Wright
CEO, Moonpay
The payments startup burst into the mainstream with a series of high-profile brand partnerships before slashing its internal valuation amid a slump in NFTs. Now it'sformed a tie-upwith embattled crypto exchange Binance.US
What we’re reading (and writing)
- Crypto Startup Funded by Susquehanna Aims to Tokenize Stocks by Playing by the Rules
- Ex-OpenSea Manager Sentenced to Three Months for NFT Insider Trading
- Binance, the Biggest Player in Crypto, Is Facing Legal Risks Over Russia(Wall Street Journal)
- SEC Set to Greenlight Ether-Futures ETFs in Crypto Industry Win
- Bitcoin Nosedive Jolts Crypto Market Out of Its Summer Stupor
- Blockchain Capital’s Bart Stephens Lost $6.3 Million in SIM-Swap Crypto Hack(Forbes)
- Becoming a Bank Proves Challenging for Fintechs Seeking Survival
