Crypto Products for European Investors Experiencing ETF FOMO
European crypto enthusiasts are on the sidelines watching as the U.S. Securities and Exchange Commission (SEC) approved eleven spot bitcoin exchange-traded funds experiencing FOMO (fear of missing out) – it’s worth noting there are already plenty of products available in Europe.
Crypto ETPs in Europe
Although the US market is bigger and has more potential to unlock inflows into Bitcoin (hence all the excitement around a spot Bitcoin ETF being approved) — Europe already has exchange-traded products (ETPs) available for retail investors. Spot Bitcoin ETPs have existed in Europe for a long time giving investors crypto exposure. Europe is way more progressive on the cryptocurrency product front.
Back in May 2015, Sweden’s XBT Provider AB announced the authorization of Bitcoin Tracker One (CoinShares product). This was the very first Bitcoin-based security made available on a regulated exchange. In October 2015, it launched Euro-denominated Bitcoin-based security, Bitcoin Tracker EUR, available through Nasdaq Nordic.
Main Providers
European ETP players in the market include 21Shares, CoinShares, WisdomTree, VanEck, Valour, Invesco, Hashdex, ETC Group. It is unlikely a Bitcoin ETF will list in Europe due to regulatory hurdles. Laurent Kssis, director at financial services firm CEC Capital, explains a Bitcoin ETF would never exist under UCITS laws in Europe, an ETF in definition is a basket of stocks and offers diversification where no one component has more than 20% of allocation.
Crypto ETF and ETP Flows
On the first day of trading, US spot bitcoin ETFs gathered over $4 billion in trading volumes. BlackRock’s product saw its ETF gather roughly a quarter of the volumes and the Grayscale Bitcoin Trust (GBTC) which was converted to an ETF saw almost half the volumes. Bloomberg Intelligence analyst Eric Balchunas tweeted, “there were 700,000 individual trades on the first day of trading in and out of the 11 spot ETFs.” “For context, that is double the number of trades for $QQQ (altho it sees much bigger $ volume bc bigger fish use it) So a lot more grassroots action (vs big seed buys) than I expected which is good,” tweets Balchunas.
ETPs and ETFs Listed Globally Gain Momentum
Crypto ETFs and ETPs listed globally have increased 119.6% in the first 11 months of 2023, according to ETFGI, an independent research and consultancy covering trends in the ETFs space.
In November last year, crypto ETFs and ETPs listed globally gathered net inflows of $1.31 billion bringing year-to-date net inflows to $1.60 billion.In Europe, regionally, crypto ETPs listed in Germany and Switzerland saw inflows of $663 million and $434 million in 2023, accounting for 22% and 13% of assets under management (AUM) respectively, according to ETF Stream.
