In a significant move for the cryptocurrency market, BlackRock (BLK), the world’s largest asset management firm with over $10 trillion in assets under management (AUM), is set to list a Bitcoin Exchange-Traded Product (ETP) in Europe. This development, reported by Bloomberg, marks BlackRock’s first foray into the crypto-linked ETP market outside of the United States.
The forthcoming fund will be based in Switzerland, with BlackRock expected to commence marketing efforts as early as this month. This initiative comes on the heels of the company’s U.S.-based iShares Bitcoin ETF (IBIT), which has seen extraordinary success, amassing nearly $60 billion in assets within just over a year of operation.
BlackRock’s entry into the European crypto ETP landscape aligns with a growing trend of investment firms eager to provide crypto-backed securities in the region. Recently, Kraken secured a license allowing it to offer derivatives, joining other platforms such as Bitstamp and FTX EU.
The introduction of BlackRock into the European market could further intensify competition among various providers, who have been engaging in aggressive fee adjustments. For instance, recent reports indicate that some management fees for ETPs have soared as high as 2.5%, while others are now offering fee waivers to remain competitive. A similar wave of competitive pricing occurred in the U.S. following the launch of these funds in January 2024.
However, several uncertainties surround this new product, notably its fee structure, which holds significant implications for the ETP’s performance. Eric Balchunas, a Senior Analyst at Bloomberg, noted, “I don’t know the fee yet; that will be a big variable. U.S. ETFs outperform the rest of the world in terms of cost and liquidity, but either way, this demonstrates commitment from the world’s largest asset manager, which has a considerable global presence.” According to Balchunas, U.S.-based Bitcoin ETFs currently capture a staggering 91% of the global market share.
As BlackRock prepares to roll out its Bitcoin ETP, the investment community watches closely, anticipating how this move will shape the future landscape of cryptocurrency investments in Europe. With the world’s largest asset manager stepping into this arena, the implications for both institutional and retail investors could be substantial.
