European Bitcoin ETFs: Opportunities and Challenges

Bitcoin exchange traded funds (ETFs) in the US have gained significant attention, driving the cryptocurrency to record highs. With the SEC’s approval, several firms have launched spot bitcoin ETFs, accumulating $48bn in assets. The expansion of the digital assets universe is anticipated, including the possible approval of a spot ethereum product in May. In Europe, the landscape is different, with limited availability of bitcoin products for retail investors due to regulatory constraints. However, European asset managers have developed other crypto-related exchange traded products, which held $12bn of assets by the end of February. These products offer a similar investment experience and provide transparent exposure to underlying assets. Despite the challenges in marketing and distribution, European crypto-related ETPs have seen a substantial increase in assets since the end of 2022. However, amid investor interest, European financial authorities are yet to be fully convinced of bitcoin's suitability as an investment or means of payment.