Eurozone Unfazed by US Bitcoin Gold Rush: ETPs Still King in Castles
Investors in Europe already have access to Bitcoin financial products, so market watchers are skeptical that the approval of a Bitcoin exchange-traded fund (ETF) will excite them. European investors have had access to listed cryptocurrency products for years, but they have not been particularly well received.
This is despite the fact that the United States Securities and Exchange Commission has historically approved eleven investment firms. Additionally, there is a growing expectation that the iShares unit of BlackRock, Fidelity Investments, and other industry leaders in the asset management sector will bring Bitcoin to the common people.
The mentality of European investors is distinct from that of their American counterparts when it comes to the capital markets. Compared to consumers in the United States, they tend to be less risk-taking, have higher rates of cash savings, and have retirement systems that are less dependent on earning returns in the capital markets.
Exchange-traded products (ETPs) that behave like exchange-traded funds (ETFs) are already available from the top five Bitcoin exchange-traded funds (ETPs), which include CoinShares, 21shares, WisdomTree, and VanEck.
The difference in financial culture between the US and Europe is one reason why European investors generally have less exposure to financial products like ETFs. For a financial product like a Bitcoin ETF to kick off, “you need a population that doesn’t assume the government is going to help you with retirement,” Eric Balchunas, a Bloomberg Intelligence analyst, said
For European institutional investors, a Bitcoin ETF may be less appealing because it is a smaller niche than ETFs in general. When it comes to retail investors, de Lastours reckons users would rather invest directly in Bitcoin than through an ETF. Industry observers predict that a new crypto bull market will have an impact in 2024 and may end up piquing the interest of investors, which will likely benefit current products like those from CoinShares more than banks.
In any case, European investors will not have access to the US Bitcoin ETFs. Patrick Hansen, director of EU strategy and policy at stablecoin provider Circle, posted on LinkedIn that if these Bitcoin ETFs are approved as expected, US investors will have much cheaper and safer options for Bitcoin-based security products than EU investors.
However, not everyone agrees that the ETF hype will stop at European borders. Thomas Romain, commercial director of crypto exchange Bitpanda in France, stated that any European bank or financial institution that isn’t ready to adapt is going to be left behind very quickly. The list of US firms given a green light from the SEC includes “massive institutions with trillions of dollars under management.”
