First European-Regulated Bitcoin Product Launched by the Gibraltar Stock Exchange
The Gibraltar Stock Exchange (GSX) announced the launch of BitcoinETI, an asset-backed Exchange Traded Instrument that is invested exclusively in Bitcoin, making it the first European-regulated product for the leading digital currency. The ETI is listed on GSX with the ticker BTCETI and is in the process of also being co-listed on Deutsche Börse in the coming weeks.
“GSX is an E.U.-regulated market which offers efficient and cost-effective solutions for innovative companies and financial products,” said GSX Managing Director Nick Cowan. “We look forward to supporting the BitcoinETI in its entry to the public markets.”
BitcoinETI is issued by iStructure PCC PLC, a Gibraltar-based company, in partnership with Argentarius ETI Management Limited (Listing Member of GSX and securitization specialist), Gibraltar-based fintech specialists Revoltura Limited (an iStructure PCC PLC subsidiary), the government of Gibraltar, and the Financial Services Commission (Gibraltar’s regulator).
“An Exchange Traded Instrument is a stock exchange traded security that is backed by an underlying asset or a basket of assets,” Argentarius CEO Andreas Woelfl said in a statement. “European sophisticated investors such as asset managers, pension funds, and private bankers have now the possibility to capture the performance of Bitcoin through an E.U. stock exchange.”
Exchange Traded Instruments pegged to the value of Bitcoin are convenient for traditional investors who want to bet on Bitcoin without going through the hassle of trading Bitcoin itself.
Bitcoin Tracker One, a trust listed on the Nasdaq Stockholm exchange, is up 66 percent since April 1. Grayscale Bitcoin Trust, which trades on the OTC markets and was created by Digital Currency Group CEO Barry Silbert, is up 120 percent over the same period. Earlier in July, blockchain technology company SolidX Partners filed a registration statement with the Securities and Exchange Commission (SEC) for the proposed launch of the SolidX Bitcoin Trust, a new Exchange Traded Fund for traditional investors.
“By listing the ETI on the Gibraltar Stock Exchange, which is an E.U.-regulated market, we are able to bring a high-level of transparency and liquidity to investors,” said Revoltura CEO Ransu Salovaara. “BitcoinETI is available through regulated brokerage firms across Europe and settlements are handled through Clearstream/Euroclear, just like any other securities.”
Salovaara added that Bitcoin’s annual growth was 30 percent last year, and as of July 2016 the year-to-date growth is another 50 percent. “Also importantly, the daily trading volume is around €1 billion,” he said.
In a recent Steemit post, Salovaara explained further that BitcoinETI enables asset managers, hedge fund managers and other professional investors to invest in unregulated Bitcoin through a stock exchange and standard settlement system (Euroclear), just like investing in any other security.
Reuters notes that BitcoinETI will be available through regulated brokerages across Europe, and that regulation of Bitcoin and fintech in Europe is more agile than in the United States, where the Winklevoss twins have been waiting for approval for a proposed Bitcoin exchange-traded fund for three years.
BitcoinETI has its own brand new website with daily charts, resources, and a prospectus for investors. The ETI, defined as a UCITS-eligible, asset-backed security whose value and the related performance is linked to the underlying asset (Bitcoin) collateralized in a segregated cell, can be purchased by suitable investors through their usual brokers, with a minimum investment of €100,000, a management fee of 1.75 percent, and two days settlement via Clearstream/Euroclear.
The BitcoinETI issuers express confidence that the value of Bitcoin could grow exponentially over the coming years, and invite portfolio managers seeking alternative assets to consider the digital currency as a way to diversify their investments and boost their performance.
The announcement notes that the new Bitcoin ETI forms part of a series of early initiatives aimed at establishing Gibraltar as a virtual currency hub. There are other virtual currency hubs in Europe, most notably the Isle of Man — and arguably the whole U.K. — but Gibraltar could become especially interesting in the future. In fact, the tiny region — a British overseas territory geographically located in mainland Spain and a major point of contention in Anglo-Spanish relations — has established itself as an online gambling and financial services center, and could become an important U.K.-E.U. interface after Brexit.
“We continue to work with the private sector and our regulator on an appropriate regulatory environment for operators in the digital currency space, and the launch of this ETI on our stock exchange demonstrates our ability to be innovative and deliver speed to market,” said Gibraltar’s Minister for Financial Services and Gaming, Albert Isola. “I am delighted to welcome BitcoinETI to Gibraltar and congratulate GSX and Argentarius on this initiative.”
Revoltura hinted at plans to introduce and list further digital currency and disruptive technology instruments in the near future.