BlackRock Approved to Sell Bitcoin ETP in UK, Fees Reduced to 0.15%

BlackRock, a global asset manager with nearly $12 trillion in assets under management, has received approval from the UK Financial Conduct Authority (FCA) to sell its European Bitcoin exchange-traded product (ETP) in the UK. This approval is a significant achievement for BlackRock, as it becomes the 51st company to receive FCA approval, joining other notable firms. The FCA's rigorous approval process, with only 14% of applications being successful, underscores the significance of BlackRock's achievement. This move indicates a growing interest in Bitcoin investments beyond North America.

The iShares Bitcoin ETP, listed under the ticker IB1T, has already commenced trading on Euronext Paris and Amsterdam. To attract investors, BlackRock has temporarily reduced its fee to 0.15% until the end of 2024. After this period, the fee will increase to 0.25%, aligning with CoinShares’ $1.3 billion physical Bitcoin ETP, the largest in Europe. What sets IB1T apart is that each share is backed by real Bitcoin, which is held in Coinbase custody. This structure allows investors to gain exposure to Bitcoin without the complexities of direct ownership or liability for the cryptocurrency. The product builds on the success of BlackRock’s U.S.-traded iShares Bitcoin Trust (IBIT), which has amassed over $48 billion in assets.

To comply with European financial laws, BlackRock has established IB1T through a special-purpose vehicle in Switzerland. This setup ensures that the product adheres to legal requirements while providing investors with a regulated platform to invest in Bitcoin. The expansion of BlackRock's Bitcoin investment channels throughout Europe reflects a growing international demand for such investment opportunities. European institutional and retail investors now have an alternative way to access Bitcoin without the intricacies of direct ownership. BlackRock’s entry into the market may pave the way for other traditional financial institutions to follow suit, further solidifying Bitcoin’s position in the global financial landscape.

BlackRock CEO Larry Fink has recently expressed his views on the future of Bitcoin as a safe-haven asset. In his letter to CEOs, he cautioned that rising U.S. debt could erode the dollar’s global dominance, leading investors to consider Bitcoin as a safe store of value. With this latest expansion, European investors now have a regulated means of accessing Bitcoin exposure. As governments continue to inject money into their treasuries and inflation remains a concern, the appeal of Bitcoin as an alternative asset is likely to grow. BlackRock’s latest move underscores the increasing acceptance of cryptocurrency as part of the financial mainstream.