While the wait for a U.S. Bitcoin spot exchange-traded fund continues, Invesco, a U.S. investment firm with US$1.6 trillion in assets under management, has partnered with CoinShares to launch a European exchange-traded product physically backed by Bitcoin, according to reporting on Nasdaq.com.
Fast facts
- The Invesco Physical Bitcoin ETP will be listed on Deutsche Börse Xetra, Germany’s stock market for equities and exchange-traded funds, under the symbol BTIC, and track the CoinShares Bitcoin Hourly Reference Rate Index, minus a 0.99% annual fee. The product is targeted at institutional investors looking to gain exposure to Bitcoin who may not be willing or able to invest directly.
- Technically an exchange-traded note, BTIC really differs from an ETF in name only, as VanEck director Gabor Gurbacs explained on Twitter: “In Europe, only baskets of securities can be called Exchange Traded Fund (ETF). Most single-asset commodities are structured as an Exchange Traded Note (ETN). Some are physically backed and some are certificates/bank-backed. Exchange Traded Product (ETP) is the umbrella category.”
- Bitcoin ETPs are growing in popularity in Europe as BTIC joins a growing list of other similar products available in the continent, such as Iconic Funds’ Physical Bitcoin ETP and WisdomTree Bitcoin ETP.
- One industry watcher told Forkast.News that this is another positive development for the industry, but ultimately investing directly in Bitcoin will yield the best results for investors.
- “Invesco’s launch of a Bitcoin ETP is yet another proofpoint for 2021 being the year of crypto’s embrace by the institutional investment world,” Alex Höptner, CEO of BitMEX told Forkast.News via an emailed statement. “We’ve seen adoption of crypto skyrocket this year, with an influx of digital native, retail users entering the market although as an industry we all need to do more to make crypto investing more accessible for all. Consistently strong demand for Bitcoin-themed ETFs and ETPs indicate a more traditional investor base is now also seeking exposure to crypto — but such products, whilst highly accessible, come with TradFi (traditional finance) costs baked in and certain limitations — like only being able to trade a 24/7 asset class during working week hours.”
- “Let’s be clear, it’s a much better idea to have direct exposure to Bitcoin via a crypto exchange,” he added.
- Following the successful launch of two Bitcoin futures ETFs in the U.S. — ProShares Bitcoin Strategy ETF on the New York Stock Exchange and the Valkyrie Bitcoin Strategy ETF on the Nasdaq — the U.S. Securities and Investments Commission rejected a Bitcoin spot ETF earlier this month. In explaining its decision, the SEC explained that the fund, which would be listed by global ETF investment management firm VanEck, would not be consistent with “prevent[ing] fraudulent and manipulative acts and practices” and “protect[ing] investors and the public interest.”
- Invesco had previously applied for a Bitcoin futures fund to trade in the U.S., but withdrew its application from the Securities and Exchange Commission at the last minute, partly due to its view the regulatory constraints would make it too costly for investors.