BlackRock eyes European Bitcoin ETP debut after US ETF success

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Bitcoins The expansion comes amid rising regulatory clarity and market growth.

BlackRock is poised to expand its crypto product line with the launch of a Bitcoin ETP in Europe, capitalizing on the runaway success of its US-listed spot Bitcoin ETF, the iShares Bitcoin Trust (IBIT), according to a Wednesday report from Bloomberg, citing sources with knowledge of the matter who requested anonymity due to the confidential nature of the plans.

Projected to be based in Switzerland, the planned fund would be BlackRock’s first crypto ETP in the European market. The world’s leading asset manager, which previously focused on North America, launched the IBIT fund and subsequently introduced its iShares Bitcoin ETF on Cboe Canada. The new ETP may debut as soon as this month, sources said.

BlackRock’s IBIT has become one of the largest Bitcoin ETFs since its launch last January, accumulating approximately $58 billion worth of Bitcoin as of February 4. The fund ranks as the 31st largest ETF globally across all categories, including traditional finance products, according to VettaFi.

IBIT has led the spot Bitcoin ETF market with a five-day winning streak, attracting nearly $934 million in net inflows since January 30. Yesterday’s inflows alone totaled approximately $249 million, driving most of the spot Bitcoin ETF market’s gains, according to data from Farside Investors.

The European crypto ETP market currently features more than 160 products tracking various digital assets, though its size remains smaller than the US market. The expansion comes as Bitcoin has reached new highs this year, amid increased regulatory clarity following the EU’s implementation of new crypto rules.

Bitcoins High stakes, uncertain outcome

Bloomberg ETF analyst James Seyffart initially speculated that BlackRock might consider replicating its Canadian Bitcoin ETF structure in Europe using a “wrapper” approach, where the ETF holds shares of its US-listed IBIT. However, he swiftly confirmed that this strategy is unlikely to be allowed under EU regulations.

Sources told him that EU regulators are poised to reject such a workaround, likely requiring BlackRock to launch a standalone European Bitcoin ETF. This necessitates a different approach and puts the spotlight squarely on fees.

“I have been informed that this is unlikely to be allowed in EU. So will be interesting to see what they charge assuming they launch a standalone product. In the US the total cost is 25 bps. Canada is 32 bps,” he wrote on X. “There’s already products at 25 bps and lower in Europe including Valour who has a zero expense ratio product.”

Beyond regulatory hurdles and pricing pressures, BlackRock faces a more fundamental challenge: market size and investor appetite, Eric Balchunas, Seyffart’s fellow Bloomberg ETF analyst, shared in a comment.

The US spot Bitcoin ETF market, despite being just a year old, has exploded in popularity, capturing a staggering 91% of global market share. Europe, by contrast, lags considerably. While European investors are sophisticated, they have historically shown less enthusiasm for the high-octane investment products that have resonated with US investors.