First US listed ETFs holding spot Bitcoin start trading today

First US listed ETFs holding spot Bitcoin start trading today

Equities 3 minutes to read
Peter Garnry

Chief Investment Strategist

Summary:  The US regulator SEC has approved the first US ETFs holding spot Bitcoin opening up Bitcoin exposure to a much wider global audience. There will be 11 new ETFs starting trading today all with low expense ratios as the arms race has begun to become the world’s largest spot Bitcoin fund. What it will mean for the Bitcoin price is difficult to say at this point, but in other markets such as gold and uranium where ETFs were holding the underlying physical asset the impact has been positive on the price. For European investors under ESMA regulation the new US ETFs on spot Bitcoin will not mean much as they will not be compliant for European investors.


SEC approves Bitcoin spot ETFs

Yesterday, in a landmark decision, the US financial regulator the SEC approved the first spot Bitcoin ETFs for public listing. The cryptocurrency industry has been waiting for this moment for years and been fighting US regulators in court to get to this point. There are right now 11 ETFs planned to list with all of them approved yesterday, so the race is now on to become the biggest spot Bitcoin ETF. These 11 ETFs will start trading today and the list below highlights the ETFs, ticker code and primary exchange. The BlackRock iShares Bitcoin Trust will launch with a total expense as low as 12 bps.

What will it mean for the Bitcoin price?

After a horrible 2022 for cryptocurrencies the market bottomed out in November 2022 and since then spot Bitcoin is up 185% with the trade in 2023 increasingly being about anticipating the upcoming SEC decision on US ETFs tracking spot Bitcoin. Following the SEC decision, we have not seen much price movements with spot Bitcoin trading around the 46,250 level up less than a percent in today’s trading session.

XBTUSD weekly price | Source: Bloomberg

The big question is now whether this Bitcoin trade was a buy the rumour sell the facts like we saw back in 2017 when CME Group and Cboe Global Markets launched the first Bitcoin futures. ETFs holding underlying physical assets have in other markets such as gold and uranium been a positive factor for price developments and especially in the case of uranium, the new physical ETFs have tighten the market causing uranium prices to rally. The question is whether we will see the same developments over time with these 11 new ETFs holding spot Bitcoin as it opens the door for many more investors in the world’s largest financial market. It is important to note that SEC Chair Gary Gensler that specifically that while the SEC has approved these ETFs the regulator are by no means endorsing the underlying market, saying that retail investors should still be very cautious on investing into cryptocurrencies.

It does not change much for European investors

While the SEC approval is a big thing in the US, ETFs holding spot Bitcoin and other cryptocurrencies have been available to investors outside the US for a long time. For European investors the launch of US ETFs on spot Bitcoin mean little as these ETFs will not be available for retail investors in the EU as these ETFs will not be compliant with UCITS regulation. As such, the new spot Bitcoin ETFs will only be available to professional investors in Europe.

For jurisdictions outside ESMA regulation such as Switzerland, UAE, and APAC the launch of US spot Bitcoin ETFs will open up new opportunities for investing more cheaply into Bitcoin. There are jurisdictions such as United Kingdom where crypto derivatives are banned for UK investors and Hong Kong were cryptocurrencies are illegal. For those two jurisdiction none of these new ETFs will make any difference.

So for many European retail investors the access to spot Bitcoin will not change the largest ETF is the Bitcoin Tracker EUR incorporated and listed in Sweden with €828mn in total assets and total expense ratio of 2.5%. So for this particular ETF in Europe the new US ETFs could put on some pricing pressure as it is 20 times more expensive than the iShares Bitcoin Trust and thus any professional investor in the EU that has exposure to Bitcoin through the Bitcoin Tracker EUR ETF would ideally switch fund exposure.

Bitcoin Tracker EUR ETF| Source: Saxo

Quarterly Outlook

01 /

  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy

  • Equity Outlook: Will lower rates lift all boats in equities?

    Quarterly Outlook

    Equity Outlook: Will lower rates lift all boats in equities?

    Peter Garnry

    Chief Investment Strategist

    After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto...
  • FX Outlook: USD in limbo amid political and policy jitters

    Quarterly Outlook

    FX Outlook: USD in limbo amid political and policy jitters

    Charu Chanana

    Chief Investment Strategist

    As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ...
  • Commodity Outlook: Gold and silver continue to shine bright

    Quarterly Outlook

    Commodity Outlook: Gold and silver continue to shine bright

    Ole Hansen

    Head of Commodity Strategy

  • Macro Outlook: The US rate cut cycle has begun

    Quarterly Outlook

    Macro Outlook: The US rate cut cycle has begun

    Peter Garnry

    Chief Investment Strategist

    The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c...
  • FX: Risk-on currencies to surge against havens

    Quarterly Outlook

    FX: Risk-on currencies to surge against havens

    Charu Chanana

    Chief Investment Strategist

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo...
  • Equities: Are we blowing bubbles again

    Quarterly Outlook

    Equities: Are we blowing bubbles again

    Peter Garnry

    Chief Investment Strategist

    Explore key trends and opportunities in European equities and electrification theme as market dynami...
  • Macro: Sandcastle economics

    Quarterly Outlook

    Macro: Sandcastle economics

    Peter Garnry

    Chief Investment Strategist

    Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p...
  • Bonds: What to do until inflation stabilises

    Quarterly Outlook

    Bonds: What to do until inflation stabilises

    Althea Spinozzi

    Head of Fixed Income Strategy

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ...
  • Commodities: Energy and grains in focus as metals pause

    Quarterly Outlook

    Commodities: Energy and grains in focus as metals pause

    Ole Hansen

    Head of Commodity Strategy

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...

Disclaimer

The Saxo Group entities each provide execution-only service, and access to analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Inspiration Disclaimer and (v) Notices applying to Trade Inspiration, Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular, no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Trading in financial instruments carries risk, and may not be suitable for you. Past performance is not indicative of future performance. Please read our disclaimers:
Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
Full disclaimer (https://www.home.saxo/en-sg/legal/disclaimer/saxo-disclaimer)

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Markets or its affiliates.

Saxo Markets
88 Market Street
CapitaSpring #31-01
Singapore 048948

Contact Saxo

Select region

Singapore
Singapore

Saxo Capital Markets Pte Ltd ('Saxo Markets') is a company authorised and regulated by the Monetary Authority of Singapore (MAS) [Co. Reg. No.: 200601141M ] and is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms & Risk Warning to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products such as Margin FX products may result in your losses exceeding your initial deposits. Saxo Markets does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Markets does not take into account an individual’s needs, objectives or financial situation.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-sg/about-us/awards.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website are not intended for residents of the United States, Malaysia and Japan. Please click here to view our full disclaimer.

This advertisement has not been reviewed by the Monetary Authority of Singapore.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.