EU Remains Skeptical of Crypto Investments amidst Bitcoin ETF Fever

The launch of spot Bitcoin exchange-traded funds (ETFs) in the United States is having an impact in Europe, but European investors are still cautious about investing in cryptocurrencies. In an interview with , VanEck Europe CEO Martijn Rozemuller discussed the differences in investor attitudes between the US and Europe. Rozemuller noted that US investors are more willing to take risks and trade on exchanges, while some European investors are still relying on traditional mutual funds. In Europe, retail users, smaller wealth managers, and family offices are the main participants in the cryptocurrency sector, as larger financial institutions are reluctant to participate. European regulators have expressed a lack of support for crypto-related investments.

The approval of spot Bitcoin ETFs in the US has attracted attention globally, but current European regulations do not allow for investment products focused solely on a single underlying asset. According to Europe’s UCITS regulation, diversification is required within investment products, making it impossible to create a Bitcoin ETF. VanEck Europe has overcome this obstacle by offering a range of exchange-traded products (ETPs) that provide exposure to cryptocurrencies. These ETPs utilize ETN structures, which allow Bitcoin to be included in the product. While there are legal differences between ETNs and ETFs, they can be traded similarly.

VanEck Europe offers a Bitcoin ETN that closely resembles spot Bitcoin ETFs in the US. The company has also launched ETNs for Ethereum, Solana, Avalanche, and Tron. In addition to these ETNs, VanEck has the Crypto and Blockchain Innovators UCITS ETF, which provides diversified exposure to cryptocurrency exchanges, miners, and infrastructure companies. The ETF includes shares of Bitcoin miners such as Riot Blockchain, Marathon Digital, and Argo Blockchain, as well as companies like Coinbase and MicroStrategy.

When asked about the need for cryptocurrency ETPs or ETFs when retail investors can easily trade tokens on exchanges, Rozemuller explained that many investors, particularly older individuals, are hesitant to self-custody their assets. They are concerned about the security risks and potential losses associated with holding cryptocurrencies on exchange platforms. Therefore, investment products that offer exposure to cryptocurrencies through traditional investment accounts are seen as a middle ground. These products provide safekeeping services and are managed by experienced and reputable providers.