BlackRock is preparing to introduce an exchange-traded product (ETP) linked to Bitcoin (BTC) in Europe, Bloomberg News reported on Feb. 5.
According to sources familiar with the matter, the fund is expected to be domiciled in Switzerland, and BlackRock could begin marketing the product as early as this month.
Bloomberg ETF analyst James Seyffart said BlackRock could potentially launch the new ETP in a similar way it did in Canada. The Canadian ETP is a wrapper for IBIT, BlackRock’s spot Bitcoin exchange-traded fund (ETF) available in the US. However, Seyffart noted that such a move would have a low chance of success in Europe.
War of fees
Seyffart highlighted that BlackRock Bitcoin ETPs in the US and Canada have fees of 25 basis points and 32 basis points (bps), respectively. Notably, European products already offer exposure to BTC through funds carrying a 25 bps fee.
Eric Balchunas also showed interest in seeing the fees charged by BlackRock in Europe. He explained that the US is commonly the best in the rest of the world in terms of cost and liquidity.
Balchunas added:
“Either way shows commitment from world’s biggest asset manager who has big presence overseas.”
A relatively small market
The European market for crypto ETPs includes more than 160 products that track Bitcoin, Ethereum (ETH), and other digital assets. The market’s cumulative value is $17.3 billion.
Balchunas highlighted that the European crypto ETF landscape is “barely on [the] leaderboard,” as the US spot Bitcoin ETFs represent 91% of the global share.
He assessed that BlackRock had a chance to succeed by bringing the “US Terrordome” to Europe. Yet, Balchunas noted that European investors, unlike US and Asian investors, have less appetite for riskier investment products.
According to Farside Investors data, IBIT recorded $40.7 billion in net inflows as of Feb. 4. Its inflows are over three times larger than Fidelity’s FBTC, the second-largest spot Bitcoin ETF.
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