Jacobi Asset Management’s application for Europe’s first spot Bitcoin exchange-traded fund (ETF) could start trading by the end of this month after a delay of 12 months from the initially planned launch date. The company announced that it is resuming its efforts for Europe’s first spot Bitcoin ETF, stating that “the demand has changed since last summer.”
Jacobi Asset Management Commented, “The Demand Has Changed Since Last Summer”
Jacobi Asset Management had announced in July 2022 that the spot Bitcoin ETF would be listed on the Euronext Amsterdam exchange, but the asset management company withdrew its application, saying the timing was not right to list an ETF, and announced that the ETF would be opened for trading at a more appropriate time in the future.
The step back for Jacobi Asset Management’s ETF launch was due to the cryptocurrency market dealing with several adversities around this time last year. The crypto market was struggling with the collapse of the Terra ecosystem, the bankruptcies of hedge fund Three Arrows Capital and large crypto credit companies.
With the market leaving behind ecosystem collapses and waves of bankruptcies, and the world’s largest asset management company BlackRock submitting a spot Bitcoin ETF application to the U.S. Securities and Exchange Commission (SEC) in June, the market was shaken by the spot Bitcoin ETF applications made again or from scratch by giant asset management companies.
Jacobi Asset Management, which has moved again on the subject of the first spot Bitcoin ETF in Europe, announced that the Bitcoin ETF could be opened for trading by the end of the month, stating “the demand has changed since last summer.”
European ETFs Are Actually ETNs
All digital asset products (ETPs) traded on the European stock exchange are structured as exchange-traded notes (ETNs) rather than funds. ETFs are investment funds that can be traded on an exchange like shares. ETF shareholders hold a portion of the underlying assets of the fund. ETNs are debt securities that track the price of an underlying asset like a digital currency. ETN investors do not hold the underlying asset.
Jacobi Asset Management preferred to launch an ETF instead of an ETN because ETFs are more transparent and liquid. Therefore, this means it is similar to the spot Bitcoin ETF expected to be launched in the U.S.
The founder of ETF and digital asset advisory Blackwater Search and Advisory, Michael O’Riordan, emphasized that it will be very difficult to launch a spot Bitcoin ETF in Europe. Speaking to the Financial Times, O’Riordan said, “Apart from some structural differences, ETFs and ETPs are quite similar in practice. As an industry, we didn’t do a good job distinguishing each one, and as a result, there is a lot of confusion in the market about which is which.”
Over the past year and a half, digital asset ETPs in Europe saw a net inflow of $483 million, $398 million of which came in the third quarter of 2022 alone. Total assets in European digital asset ETPs, which peaked at 10.5 billion Euros at the end of 2021, are currently at 4.3 billion Euros.
