Jacobi Asset Management’s decision to launch a spot bitcoin ETF on Euronext Amsterdam this week proved to be a stroke of marketing genius amid the ongoing heated debate in the United States.
The Jacobi FT Wilshire Bitcoin ETF (BCOIN) is listed on Euronext Amsterdam and regulated by the Guernsey Financial Services Commission (GFSC), which has amended its rules to approve the structure in October 2021.
It is important to note that only professional investors in the UK and the Netherlands with more than $100,000 can access the Bitcoin ETF, which is an Alternative Investment Fund (AIF), and it will only benefit not follow the same distribution rules as other UCITS or stock exchange-traded ETFs. products (FTE).
“Guernsey is offshore, so not as strictly regulated as the Central Bank of Ireland (CBI) or the Financial Sector Supervisory Commission (CSSF), but it has a strong history in financial services,” said partner Shane Coveney at Dillon Eustace’s. ETF Feed.
“It is not a UCITS product but an AIF, which allows professional investors to be directly exposed to bitcoin in cash.”
However, that hasn’t stopped the deluge of media coverage in recent days, highlighting how Europe beat the US by launching the first spot Bitcoin ETF.
Last week, the Securities and Exchange Commission (SEC) once again delayed its decision on whether to approve or reject a bitcoin spot ETF.
BlackRock’s decision to file a spot bitcoin ETF In June, many industry commentators predicted that the US regulator would green light the structure, but investors must continue to wait.
US investors can currently only invest in Bitcoin futures ETFs, while European investors, on the other hand, have been able to access spot bitcoin via exchange-traded notes (ETNs) since 2018.
“It is exciting to see Europe ahead of the United States in opening up Bitcoin investing to institutional investors who want to access the benefits of digital assets,” said Martin Bednall, CEO of Jacobi Asset Management.
“Unlike other products in the European market which are debt instruments, our fund directly holds the underlying assets.”
The launch announcement last year sparked a war of words among numerous crypto ETP issuers in Europe who warned that the structure was created solely for the purpose of gaining a “PR advantage.”
“This whole thing is a marketing ploy that draws on the whole American saga,” said Townsend Lansing, head of product at CoinShares. ETF Feed. “The Jacobi product is an FIA and is therefore not available for general public distribution.
“There is a reason why issuers do not select this product structure – whether for crypto or other non-eligible assets like gold. It offers no significant benefits, has limited chances of adequate liquidity and is very difficult to distribute.
However, Bednall said the AIF structure is “a better product with greater investor protection”.
“Investors are free to choose between the different product structures, but, all things being equal, I know the majority would still choose a fund over a security,” he added.
The launch of Jacobi AM has certainly generated a lot of hype but time will tell if its ETF will be a success. As always, investors will vote with their assets.