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Europe Opens The First Bitcoin Spot ETF, Ahead Of The U.S. — BTC Price Unmoved

Published August 16, 2023 12:43 PM
Omar Elorfaly
Published August 16, 2023 12:43 PM

Key Takeaways

  • Netherlands accepts the first Bitcoin spot ETF in Europe
  • Bitcoin price remains unchanged despite the ETF announcement
  • EU ETF regulations shed light on a conservative SEC in the U.S.

Jacobi Asset Management just launched the first Bitcoin spot ETF in Europe . Jacobi FT Wilshire Bitcoin ETF not only marks a transformation in the European crypto market but also pushes forward the environmental sustainability efforts that support the longevity of the trade in the region. 

Although initially planned for launch in July 2022 on Euronext Amsterdam, the ETF was postponed till August 2023 due to market instability caused by the collapse of FTX and Terraform Labs.

Sustainable Crypto

The ETF, overseen by the Guernsey Financial Services Commission (GFSC), trades under the ticker (BCOIN). The regulating body will ensure that the ETF complies with EU crypto regulations, while Flow Traders will take the responsibility of making market-making decisions. On top of that, Jane Street and DRW have been officially placed as authorized participants.

In his announcement , Martin Bednall, CEO of Jacobi Asset Management, said, “The Jacobi FT Wilshire Bitcoin ETF represents the world’s first SFDR Article 8 decarbonized digital asset fund. Jacobi in partnership with Zumo has implemented a verifiable, regulated, built-in Renewable Energy Certificate (REC) solution which allows institutional investors to access the benefits of Bitcoin whilst also meeting ESG goals.”

To which Kirsteen Harrison, Environmental Manager, Zumo, added, “The decarbonisation of crypto is one of the most pressing challenges facing the nascent digital assets sector, and there is increasing pressure on all businesses to have credible plans to decarbonize.

“We’ve been working closely with Jacobi Asset Management to help them build out an ESG-aligned, future-proofed crypto offering for their customers. It’s hugely exciting to see it come to life in the shape of Europe’s first Bitcoin ETF. We’re creating the investment products of tomorrow – what a moment for the industry.”

The efforts above comply with the rigorous regulatory measures put forth by the European Union. The political party maintained a forward-thinking approach when developing the regulatory structure for digital asset trading. Hence, the European Union had to factor in institutions, customers, local economics, and the environmental impact of the industry.

Jacobi Asset Management did not immediately respond to a request for comment.

Bitcoin Price Unchanged?

Considering the scale of Jacobi Asset Management’s announcement, the emergence of Europe’s first Bitcoin spot ETF should’ve had a resounding impact on the price of Bitcoin, but that was not the case.

Bitcoin spot ETFs allow investors to invest their funds into Bitcoin’s evolving pricing future. As Larry Fink, CEO of BlackRock, the world’s biggest asset manager, once put it: Bitcoin ETFs are meant to “democratize crypto,” allowing a more comprehensive range of investors to get involved in the market. 

Spot ETFs are meant to provide access to crypto investing to everyday investors without needing to buy the asset itself, removing the financial entry barrier for many potential entrants. 

If spot ETFs are truly going to change the landscape of Bitcoin investment, then why didn’t the announcement impact Bitcoin prices?

When Jacobi FT Wilshire Bitcoin ETF was announced, Bitcoin was priced at around $29,300. At the time this article was written, Bitcoin was priced at $29,148. It would be difficult to attribute the drop in Bitcoin’s value to the ETF’s announcement. However, the announcement seemingly did not impact Bitcoin positively. 

Will U.S. Bitcoin Spot ETFs Influence Bitcoin Pricing?

Many major asset managers have submitted their Bitcoin spot ETF applications to the US Securities and Exchange Commission for assessment. The likes of BlackRock, Fidelity, and Ark Investment are now waiting patiently for the regulating commission, led by Gary Gensler, to provide a definitive response to their applications.

But, if Jacobi FT Wilshire Bitcoin ETF’s announcement is anything to go by, there’s a chance that spot ETF approvals in the US might not have the impact many have perceived to be certain.

However, Reports  claim ETFs currently hold 10% of the total crypto market value.

Granted, BlackRock’s announcement of applying for such an ETF sent Bitcoin surging by $4,000 immediately. But, the regulatory environment created by the SEC has been nothing short of challenging for the market. As a result, the hype slowed down around the announcement. Moreover, many stakeholders are now losing faith in spot ETFs actually receiving approval from the regulating body as the SEC recently announced  it will be delaying spot ETF approvals.

Crypto Regulations: U.S. Vs. EU

“The hostile and uncertain regulatory climate in the United States has introduced an unpredictable operating environment impacting the entire American business community,” reads a Tweet  from Binance.US’ Twitter account. 

The company faces charges filed by the SEC for allegedly committing several fouls as a crypto exchange, including wash trading and commingling customer funds. As a result, Binance was forced to halt all USD trades and suspend OTC trades, and trade pairs.

While Binance’s case does not represent the overall picture of crypto struggles in the US regulatory environment, it showcases the results of the lack of clarity provided by the SEC.

Multiple crypto institutions have already faced SEC litigations due to this fact. Coinbase, the biggest US-based exchange, is now facing a lawsuit filed by the regulating body for allegedly trading in unregistered securities.

The same claim has been made on several occasions, such as with Ripple, simply due to the fact that the SEC has yet to create a clear guideline for digital asset trading.

For that very reason, the SEC is now facing a slew of opposition, comprised of crypto institutions, members of the government, and even accredited academics. 

On the other hand, the EU has exhausted considerable amounts of time and energy to create a regulatory environment that ensures the safety of customers and businesses alike and creates a stable platform on which crypto businesses can continue to develop technology and trade.

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