Jacobi Asset Management’s decision to launch a spot bitcoin ETF on Euronext Amsterdam this week has proved to be a stroke of marketing genius amid the ongoing heated debate in the US.
The Jacobi FT Wilshire Bitcoin ETF (BCOIN) is listed on Euronext Amsterdam and regulated by the Guernsey Financial Services Commission (GFSC), which changed its rules to approve the structure in October 2021.
It is important to note that only professional investors in the UK and Netherlands with over $100,000 can access the bitcoin ETF, which is an alternative investment fund (AIF), and it will not enjoy the same distribution rules as other UCITS ETFs or exchange-traded products (ETPs).
“Guernsey is offshore so not as tightly regulated as the Central Bank of Ireland (CBI) or Commission de Surveillance du Secteur Financier (CSSF) but it has a strong history in financial services,” Shane Coveney, partner at Dillon Eustace, told ETF Stream.
“It is not a UCITS product but an AIF so professional investors will get direct exposure to spot bitcoin.”
However, this has not halted the deluge of media coverage over the past few days highlighting how Europe beat the US in launching the first spot bitcoin ETF.
Last week, the Securities and Exchange Commission (SEC) again delayed its decision to approve or reject a spot bitcoin ETF.
BlackRock’s move to file for a spot bitcoin ETF in June led many industry commentators to predict the US regulator would greenlight the structure, however, investors must continue to wait.
US investors can only currently invest in bitcoin futures ETFs while European investors, in contrast, have been able to access spot bitcoin via exchange-traded notes (ETNs) since 2018.
“It is exciting to see Europe moving ahead of the US in opening up bitcoin investing for institutional investors who want access to the benefits of digital assets,” Martin Bednall, CEO of Jacobi Asset Management, said.
“Unlike other products in the European market which are debt instruments, our fund owns the underlying assets directly.”
The announcement of the launch last year sparked a war of words between many crypto ETP issuers in Europe who warned the structure was created solely in order to gain a “PR advantage”.
“This is all a marketing ploy which plays off of the whole US saga,” Townsend Lansing, head of product at CoinShares, told ETF Stream. “The Jacobi product is an AIF and therefore not available for general public distribution.
“There is a reason why issuers do not select this product structure – whether for crypto or other ineligible assets such as gold. It does not offer any meaningful benefits, has limited chance of proper 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 else being equal, I know the majority would always choose a fund over a note,” he added.
Jacobi AM’s launch has certainly created a lot of media hype but time will tell whether its ETF will be a success. As always, investors will vote with their assets.
