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Key Insights:
- BlackRock is launching its first European Bitcoin ETP, listing on Xetra, Euronext Paris, and Amsterdam.
- Coinbase will custody the Bitcoin backing BlackRock’s ETP.
- BlackRock’s fee waiver makes IB1T one of Europe’s lowest-cost Bitcoin ETPs.
BlackRock Inc., the world’s largest asset manager, is set to launch a Bitcoin exchange-traded product (ETP) in Europe. This follows the success of its U.S.-listed fund tracking the cryptocurrency, which has amassed $48 billion in assets.
Per a Bloomberg report, the new ETP will be listed on Xetra and Euronext Paris under the ticker IB1T, and on Euronext Amsterdam under BTCN. Trading is scheduled to begin on Tuesday. To attract investors, BlackRock has introduced a temporary fee waiver of 10 basis points, reducing the expense ratio to 0.15% until the end of the year.
BlackRock Expands Its Crypto Offerings
This marks BlackRock’s first venture into crypto-linked ETPs outside North America. Unlike the U.S. market, where Bitcoin ETFs have gained significant traction, Europe’s cryptocurrency ETP market remains smaller. Reports indicate the European market holds approximately $13.6 billion in assets, a fraction of what the U.S. market has accumulated.
BlackRock’s iShares Bitcoin Trust, introduced in January last year, became the fastest-growing exchange-traded fund (ETF) in market history. The new European instrument is expected to attract both institutional and informed retail investors. The company stated that the product will be issued by a special-purpose vehicle-based in Switzerland.
Meanwhile, crypto exchange Coinbase Global Inc. has been selected as the custodian for the physical Bitcoin backing the ETP. BlackRock’s decision to enter the European market comes as demand for crypto investment products continues to expand beyond the U.S.
Fee Structure and Market Competition
At launch, IB1T will be one of the most cost-effective crypto investment products available in Europe. The temporary fee waiver positions it competitively against existing offerings. Once the waiver period ends, the expense ratio will revert to 0.25%—the same fee charged by CoinShares International Ltd’s $1.3 billion physical Bitcoin ETP, the largest in the European market.
European investors have had access to crypto-linked ETPs for years. However, the scale and pace of growth have been slower compared to the U.S. The introduction of BlackRock’s product could bring additional liquidity and investor interest to the region’s crypto ETP landscape.
Bitcoin’s Investment Perception
Amid the launch of its European Bitcoin ETP, BlackRock’s digital asset division has addressed misconceptions regarding Bitcoin’s investment risk. Robert Mitchnick, head of BlackRock Digital Assets, stated in an interview that the cryptocurrency industry has contributed to Bitcoin being perceived as a high-risk asset. He believes Bitcoin’s properties prove that it should be viewed differently as an investment.
Mitchnick also noted that some industry narratives have reinforced the perception of Bitcoin as a speculative asset. The manager makes these statements as Bitcoin ETFs are becoming accepted by financial institutions. US financial agencies allowed Bitcoin ETFs after their approval in early 2021 bringing Bitcoin into traditional investment instruments.
The BlackRock iShares Bitcoin Trust (IBIT) asset plays the main part in this market transformation. IBIT attracted $10 billion of assets much sooner than other related investment funds. The three US Bitcoin ETFs handle $100 billion total assets at present as IBIT manages $46.5 billion of this sum.
Disclaimer
In this article, the views, and opinions stated by the author, or any people named are for informational purposes only, and they don’t establish the investment, financial, or any other advice. Trading or investing in cryptocurrency assets comes with a risk of financial loss.
