The world’s largest asset manager is entering the business. The new product originates in Switzerland.
launched the Bitcoin ETP on Tuesday, offering investors in Europe access to Bitcoin without having to directly trade or custody the cryptocurrency.
The securities are backed by Bitcoin held by Coinbase. Coinbase is also responsible for the custody solution for the process controls used to secure private keys. For the iShares Bitcoin ETP, Bitcoins are transferred daily from the trading wallet to segregated offline wallets (“cold storage”).
Lower fees until the end of the year
“The iShares Bitcoin ETP has a lot of Swiss roots. We at BlackRock Switzerland were significantly involved in its development,” says Country Manager Dirk Klee.
The iShares Bitcoin ETP has a total expense ratio (TER) of 25 basis points. A temporary fee reduction to 15 basis points is also in effect until the end of the year. The underlying Swiss Special Purpose Vehicle (SPV) is not subject to Swiss stamp duty on purchase and sale.
Building a Bridge
The world’s largest asset manager took its time with the launch of the iShares Bitcoin ETP. Ultimately, it was the development of the in recent years and client interest that prompted BlackRock to launch the ETP.
“We are convinced that ETPs can play an important role in bridging the gap between crypto and the traditional financial world – thanks to their efficiency and user-friendliness,” says Dirk Klee. For investors with suitable governance structures and sufficient risk tolerance, an allocation of 1 to 2 percent to Bitcoin in multi-asset portfolios is acceptable, Klee adds.
