BlackRock launches physical bitcoin ETP in Europe

BlackRock has officially entered Europe’s cryptocurrency exchange-traded product (ETP) market by launching a physically backed bitcoin strategy known as the iShares Bitcoin ETP (IB1T). Initially, the IB1T will have a total expense ratio (TER) of 0.15%, but this fee will increase to 0.25% at the end of the year when a temporary fee waiver expires. The new ETP, domiciled in Switzerland, is secured by bitcoin held in cold storage through Coinbase and is now available for trading on Deutsche Boerse, Euronext Paris, and Euronext Amsterdam.

This move follows BlackRock’s successful iShares Bitcoin Trust ETF (IBIT), listed in the US with a substantial $50.7 billion in assets under management (AUM), making it the largest US spot bitcoin ETF. The approval of bitcoin ETFs by US regulators in January 2024 fueled a surge in the cryptocurrency’s value, and the announcement of Donald Trump’s election as President further boosted market sentiment toward digital assets.

Bitcoin reached an all-time high surpassing $100,000 in December but has faced downward pressure recently, currently trading around $87,000. BlackRock’s decision to expand its crypto ETP offerings into Europe was data-driven, as a survey carried out in conjunction with Focal Data revealed that 75% of professional investors expressed interest in a bitcoin ETP within the next two years.

Jane Sloan, EMEA head of global product solutions at BlackRock, emphasized the importance of ETPs in bridging the gap between traditional finance and cryptocurrencies, particularly in a region with 25 million cryptocurrency investors. The iShares Bitcoin ETP is designed to deliver institutional-grade security for European investors, ensuring both access and safety.

With a TER of 0.25%, BlackRock aligns with market rates for physical bitcoin ETPs in Europe, as other major players like CoinShares, WisdomTree, and Invesco have similarly reduced their fees in a recent fee war within the sector. Despite the fierce competition, Europe’s crypto ETP market remains smaller in scale compared to the US, with the largest product boasting $1.3 billion in AUM.

In another significant development this month, HANetf introduced Europe’s first leveraged bitcoin and Ethereum exchange-traded commodities (ETCs), further expanding the region’s cryptocurrency investment options. The entry of BlackRock into Europe’s crypto ETP space marks a significant milestone for the industry, providing investors with additional avenues to gain exposure to digital assets in a secure and regulated manner.