Israeli institutions launching Bitcoin tracking funds
Bitcoin has been making waves in the financial world this past year, with its price skyrocketing by 113% to reach $94,200. Now, for the very first time, the average Israeli can invest in Bitcoin through shekels in a product that tracks its movements. Four mutual fund managers (IBI-Kessem, Meitav, More, and Migdal) have all filed prospectuses to launch funds that track Bitcoin next week. Additionally, Ayalon has filed a prospectus for a managed fund. This exciting development was made possible after the Israel Securities Authority gave the green light to the move just last week.
These tracking funds won’t be actively traded for the time being. Instead, buy and sell orders will be executed once a day. However, market sources suggest that in the future, funds will be introduced that will track the price of Bitcoin continuously throughout the day. This will enable investors to trade at any time during the session.
The shift towards integrating digital currencies like Bitcoin into the mainstream of the Israeli capital market can be traced back to a regulatory change in the US earlier this year. The US Securities and Exchange Commission permitted investment firms to establish ETFs tracking Bitcoin as an underlying asset, rather than just relying on futures contracts based on its price.
Bitcoin’s volatile nature has recently received a boost from positive remarks about cryptocurrencies by US president-elect Donald Trump during his election campaign. In April of this year, the Israel Securities Authority gave mutual funds the green light to file prospectuses for investing in futures contracts on Bitcoin and Ethereum through tracking funds. By August, the authority went a step further and allowed non-bank members of the Tel Aviv Stock Exchange to provide trading and custody services for these digital currencies.
