Europe’s First Spot Bitcoin ETF Goes Live for Trading in Amsterdam
Earlier this week, London-based Jacobi Asset Management listed the first spot Bitcoin ETF in European markets on Euronext Amsterdam. The listing comes nearly two years after the approval, however, the good news is that Europe has managed to approve the investment vehicle even before the US.
In its announcement on Tuesday, August 15, Jacobi noted that the Jacobi FT Wilshere Bitcoin ETF, under the regulation of the Guernsey Financial Services Commission (GFSC), will be traded with the ticker "BCOIN." Fidelity Digital Assets will work as the custodial services provider while trading company Flow Traders functions as the market maker.
A spot Bitcoin ETF provides direct ownership of Bitcoin, allowing investors to access its price without needing to directly purchase or manage the cryptocurrency. It is unlike a futures-based Bitcoin ETF that centers around the futures market, however, the spot Bitcoin ETF presents distinct challenges and risks.
Jacobi had first secured the approval for the spot Bitcoin ETF back in October 2021 and was planning to launch it in 2022. But looking at the crypto winter of 2022 following the collapse of the Terra ecosystem, Jacobi decided to postpone its listing.
Furthermore, Jacobi highlights the socially and environmentally responsible characteristics of the fund by incorporating a renewable energy certificate (REC) into the ETF. The fund employs external data to calculate the energy consumption of the Bitcoin network and subsequently acquires and retires Renewable Energy Certificates (RECs). These RECs are also registered on a blockchain service, enabling investors to confirm the fund's eco-friendly assertions.
The Jacobi FT Wilshire Bitcoin ETF is being highlighted as the inaugural decarbonized digital asset fund that aligns with Article 8 of the European Sustainable Finance Disclosure Regulation (SFDR), a regulation applicable to funds with environmental and social objectives.
Jacobi has collaborated with digital asset platform Zumo to implement an embedded Renewable Energy Certificate (REC) solution, enabling institutional investors to trade Bitcoin while satisfying their Environmental, Social, and Governance (ESG) objectives. Speaking on the development, Jacobi CEO Martin Bednall said:
“This makes RECs an ideal tool to use for crypto, where the most material part of the carbon footprint relates to electricity consumption […] Furthermore, the use of RECs is recognized under the Greenhouse Gas Protocol as a Market-Based accounting method and can be used to claim full decarbonization, whereas the same claim cannot be used for offsets”.
In Europe, exchange-traded notes (ETNs), also referred to as exchange-traded products (ETPs), are commonly used. Nevertheless, Jacobi's proposal marks the debut of an ETF in this domain. Unlike ETN investors who hold debt securities, ETF investors have ownership in the underlying shares. Notably, Jacobi's ETF has been designed to abstain from using leverage or derivatives, distinguishing it from ETNs.
On the other hand, the US SEC is yet to approve the first spot Bitcoin ETF in the country. However, the wave is pretty strong for now with BlackRock, the world’s largest asset manager submitting its application this June 2023.