VanEck Europe CEO Discusses Differing Attitudes Towards Bitcoin ETFs in US and Europe
Summary:
VanEck Europe CEO, Martijn Rozemuller, in an exclusive interview with Cointelegraph, outlined the differing attitudes towards Bitcoin exchange-traded funds (ETFs) between US and European investors, with the latter showing more hesitance. European major financial institutions generally do not include crypto-related commodities in their standard portfolios. Many regulatory barriers prevent the launch of spot Bitcoin ETFs, with strict European regulations that don't allow investments to have a single underlying asset. Despite the challenges, VanEck Europe has launched several innovative exchange-traded products (ETPs) that allow transparent price discovery. The company has also launched Ethereum, Solana, Avalanche, and Tron ETNs that are similarly structured.
The advent of Bitcoin exchange-traded funds (ETFs) in the United States is impacting Europe, but Europeans remain hesitant about dipping their toes in the cryptomarket. Martijn Rozemuller, CEO of VanEck Europe, in an exclusive dialogue with Cointelegraph, discussed the evident surge of interest in Bitcoin ETFs from institutional investors in the US, while indicating a different picture in Europe. He stated that American investors have a higher risk tolerance and are more acclimatized to exchange trading than their European counterparts who rely heavily on mutual funds based on the suggestion of their financial institutions.
Rozemuller further shed light on the dissimilar attitudes towards the cryptosector across the Atlantic, explaining that crypto enthusiasts in Europe are primarily retail consumers, independent wealth managers with lesser capital, and family-run businesses. He emphasized that major financial institutions in Europe show disinterest in integrating any crypto-related commodities into their standard investment portfolios.
Although Europe authorizes several exchange-traded notes (ETNs), Rozemuller notes, regulators have openly expressed their disapproval of investments related to cryptocurrencies. The absence of spot Bitcoin ETFs in Europe has led to widespread speculation, with investor interest prompted by developments outside the continent. However, due to rigorous European regulations, investments cannot comprise of a single underlying asset.
Rozemuller reasons that the UCITS regulation in Europe prevents the establishment of an ETF with a single exposure beneath it, adding further that an underlying asset must possess International Securities Identification Number (ISIN) to qualify as an ETF. Despite the challenges, VanEck Europe has managed to launch innovative exchange-traded products enabling consumers to benefit from transparent price discovery, thus averting discrepancies in premiums or discounts.
A variety of alternative investments options, such as exchange-traded commodities and ETNs, facilitate diversification. Rozemuller clarified that the latter allows entities like VanEck to incorporate digital assets like Bitcoin into their products. He added that VanEck Europe’s Bitcoin ETN, similar to the spot Bitcoin ETF offerings in the U.S., lends investors exposure to BTC, safely stowed in cold storage by Bank Frick in Liechtenstein. The company has also launched ETNs based on Ethereum, Solana, Avalanche, and Tron.
In addition to cryptocurrency-related ETNs, VanEck’s Crypto and Blockchain Innovators (DAPP) UCITS ETF aims to present investors with exposure to cryptocurrency exchanges, miners, and infrastructure companies in the larger blockchain arena.
VanEck product manager and blockchain whitepaper writer, Alessandro Rollo, provided an overview of this innovative fund. He mentioned that the DAPP ETF accounts for Bitcoin miners to a large extent, with nearly 50% of the fund's net assets including shares in companies such as Riot Blockchain, Marathon Digital, and Argo Blockchain.
Regarding the necessity for a cryptocurrency ETP or ETF, Rozemuller explained that individuals from older generations, including himself, are reluctant to self-custody significant amounts of Bitcoin or other digital currencies. A plethora of investment commodities offering remote exposure to cryptocurrencies exists as an intermediate solution. Renowned and experienced firms manage the safekeeping of assets and the products available typically via a standard investment account.
Published At
2/20/2024 2:13:45 PM
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