Europe’s first spot Bitcoin exchange-traded fund (ETF) by Jacobi Asset Management is finally set to debut on the Euronext Amsterdam exchange after facing a year-long delay.
This landmark ETF, which received approval from the Guernsey Financial Services Commission in October 2021, was originally scheduled to launch in July 2022.
Anyway, it faced postponement due to unprecedented market conditions caused by the collapse of the Terra ecosystem and the FTX collapse.
Now, with a shift in demand and market circumstances, Jacobi Asset Management is ready to move forward with the listing.
Background and Delayed Launch
The Jacobi Bitcoin ETF gained approval from the Guernsey Financial Services Commission (GFSC) to launch its Bitcoin ETF in October 2021.
However, the listing was postponed due to unforeseen events.
The collapse of the Terra ecosystem in May 2022 and the subsequent collapse of FTX in November of the same year significantly impacted market conditions and led to the delay of the ETF’s debut.
Reasons for the Delay
The collapse of the Terra ecosystem and FTX created a volatile market environment, causing Jacobi Asset Management to reassess its plans for the Bitcoin ETF launch.
These unforeseen events highlighted the need for market stability and investor confidence before proceeding with the listing.
As a result, the asset manager decided to postpone the launch to ensure a more favorable market climate for the debut.
Gradual Shift in Demand
According to Jacobi Asset Management, there has been a gradual shift in demand for the Bitcoin ETF, leading them to reconsider the launch.
The asset manager believes that the market conditions in 2023 are more conducive to introducing the ETF to investors.
This shift in demand indicates a growing interest in Bitcoin ETFs and a positive outlook for the asset class.
Central Clearing and Custody
The Jacobi Bitcoin ETF is unique in that it is a centrally cleared crypto-backed financial instrument with custody supported by Fidelity Digital Assets.
This departure from the traditional structure of exchange-traded notes (ETNs) is a significant development in the European market.
ETNs are debt securities, while ETFs provide shareholders with ownership of the underlying assets.
The use of a custodial solution provided by Fidelity Digital Assets adds an extra layer of security and trust to the ETF.
Comparison with ETNs
The key difference between an ETF and an ETN lies in the ownership of the underlying assets.
ETF shareholders have direct ownership of a portion of the fund’s underlying assets, while ETN investors hold debt securities.
Additionally, ETFs cannot be leveraged or use derivatives, reducing the risk of market manipulation.
Spot Bitcoin ETFs in Europe and the US
Europe made history by approving its first spot in Bitcoin ETF in October 2021.
In contrast, the United States Securities and Exchange Commission (SEC) has rejected all spot Bitcoin ETFs thus far.
However, in 2023, several institutional giants, including BlackRock and Fidelity, have filed fresh spot Bitcoin ETF applications in the US.
These firms are hopeful of becoming the first to receive SEC approval for a spot BTC ETF.
While the SEC approved a couple of futures Bitcoin ETFs in 2021, the introduction of spot Bitcoin ETFs in the US would mark a significant milestone for the market.
After facing a year-long delay due to market volatility, Europe’s first spot Bitcoin ETF by Jacobi Asset Management is finally set to debut on the Euronext Amsterdam exchange.
With a gradual shift in demand and improved market conditions, the asset manager believes that now is the opportune time to introduce the Bitcoin ETF to investors.
This ETF, which differs from traditional ETNs, offers direct ownership of the underlying assets and utilizes custodial services provided by Fidelity Digital Assets.
As the race for spot Bitcoin ETF approval continues in the US, the successful launch of the Jacobi Bitcoin ETF in Europe sets a precedent for the broader adoption of cryptocurrency-based investment products.