It’s been a bumpy road, but Europe is on track to welcome its first spot Bitcoin Exchange Traded Fund (ETF) following a year-long delay. The adventure began when the Jacob Asset Management Group earned the initial nod of approval from the Guernsey Financial Services Commission (GFSC) in October 2021. However, unforeseen market conditions proved to be stumbling blocks along the way.
The London-based firm aimed to debut the spot ETF on the Euronext Amsterdam Exchange in July 2022. But plans were derailed by a double dose of crypto calamities. Firstly, the crash of the Terra network in April that slashed billions from the industry’s market cap. The impending implosion of FTX made matters even worse in November.
Despite the setbacks, the firm confirms that it’s back in the saddle and ready to roll out the ETF as the market landscape has evolved since their previous attempt last summer.
Crypto endured a tough ride for the better part of 2022, with several assets trimming up to half of their value. Notably, BTC lost over 55% of its worth, only to bounce back gaining 80% in the past six months. It’s a testament to the resilience and arguably the extremes of the volatile crypto world.
But it’s not just the bounceback that’s making news. Jacobi’s spot BTC ETF is a radical departure from the conventionally institutional-backed crypto products, traditionally appearing as Exchange-Traded notes (ETN) in Europe.
In this new era, ETF holders own a slice of the fund, while ETN investors own debt security. Peter Lane, Chief Operating Officer, shines a spotlight on this difference, highlighting that ETFs are immune to leveraging, contrary to ETNs that are exposed to counterparty risks.
That said, all eyes are on the US, eager to see when the Securities and Exchange Commission (SEC) will greenlight the first spot BTC ETF. The SEC has historically closed the door on all applications, raising concerns of market manipulation and the likes.
But the times could be changing. Industry giants such as BlackRock, Valkyrie, WisdomTree, and Fidelity are knocking on the SEC’s door with applications. While it’s unclear if the American regulatory body will bend, the impact, should it occur, could be unparalleled – a significant elevation of Bitcoin’s institutional adoption that could indeed mark a turning point in the crypto narrative. As a case in point, the moment BlackRock lodged their application, the price of BTC not just hit new highs, but also regained its 50% market dominance after two years.
Source: Cryptonews
