Blackrock has been working for “years” on launching a European bitcoin ETP. The asset manager officially introduced it this Tuesday morning on the Dutch, German, and French exchanges.
Manuela Sperandeo, who leads product innovation for Blackrock’s index business in Europe, told Investment Officer Netherlands that the Exchange Traded Product (ETP) is just one part of a “multi-year journey” the firm is undertaking in the realm of digital assets. “It goes far beyond this product,” she said.
The bitcoin ETP consists of a series of Exchange Traded Notes (ETNs), which are one hundred percent physically backed by bitcoin held with Coinbase. The product is issued by a Special Purpose Vehicle based in Switzerland. The prospectus has been approved by the German regulator, the product is available in Germany, Austria, Denmark, Finland, France, Italy, the Netherlands, Norway, Sweden and Switzerland.
When asked whether the ETP will also become available in Luxembourg, a Blackrock spokesperson replied that the firm unfortunately cannot comment on future registrations.
A year after the U.S. launch
The European ETP comes more than a year after the launch of Blackrock’s U.S.-based bitcoin ETF, which now holds nearly 50 billion dollars. When asked about the delayed timing in Europe, Sperandeo pointed to European regulation—Ucits rules prohibit ETFs backed by physical bitcoin.
“We wanted to ensure the infrastructure in the region could support this launch, so that both we and our clients would be able to distribute the product to end investors. In some countries, the product will carry a ‘retail-informed’ classification, meaning distributors must provide extensive information to their clients.”
Until the end of 2025, investors in the product will receive a fee discount of 10 basis points, resulting in a total expense ratio of 15 basis points instead of 25 basis points in the first year. Asked about the reasoning behind the discount, Sperandeo said that pricing is always a major point of interest. “So I’m sure the fee waiver will be highly visible. And for a product in an emerging investment category, that visibility is especially important.”
Who will put it on the shelf?
In a January report, Blackrock had already hinted at the product’s arrival, but at the time the asset manager declined to answer additional questions about the ETP. Asset owners were aware of the preparations, as reported by Investment Officer Netherlands. When asked about their interest in February, Dutch banks said they had no concrete plans to offer the product yet, but were “following developments with interest.” Rabobank, more specifically, expressed caution in offering notes, due to the unique exposures, costs, and risks associated with these derivative products.
“We indeed had that exact conversation with clients regarding the note instrument,” Sperandeo now confirms. “But I do want to clarify—as you mentioned yourself—it couldn’t be a Ucits instrument. So we had to take a different path.”
More specifically about derivatives, she emphasized that the instrument grants a right, but that exposure to the underlying asset class is not achieved through derivatives—unlike with a bank. “The best way to think about this structure is to compare it to an Exchange Traded Commodity (ETC), such as gold. Each note entitles you to a certain quantity—of bitcoin or gold. We will publish details on our website about what that entitlement means, and distributors will do the same. When it comes to the retail-informed classification, a distributor will assess a client’s risk tolerance and experience.”
A competitive market
The European market for cryptocurrency ETPs is highly competitive. According to Bloomberg, more than 160 products track the prices of bitcoin, ether, and other tokens. The market is currently valued at 17.3 billion dollars.
As for the long-term outlook for Blackrock’s bitcoin ETP, Sperandeo again highlighted the structural differences between the European and U.S. versions, as well as potential cross-border distribution challenges. “But we wouldn’t have invested so heavily if we hadn’t seen strong demand from bitcoin investors and—more importantly—ETP investors. We’re seeing growing support from digital platforms for ETPs, which means these players are increasingly offering crypto ETPs alongside direct crypto investments. In my view, the investor adoption landscape is evolving incredibly fast. I’m curious to see what happens next.”
A recent study commissioned by Blackrock among asset managers showed significant interest in bitcoin ETPs. “Our daily conversations with sales partners confirm that as well,” said Sperandeo. “Moreover, there are more than 25 million cryptocurrency investors in Europe, and 40 percent of Dutch investors hold crypto. That really shows how widely this asset class has been embraced by end investors.”