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On Tuesday, Blackrock launched the iShares Bitcoin ETP, providing European investors with access to Bitcoin without the need to directly trade or hold the cryptocurrency.
The securities are backed by Bitcoin held by Coinbase, which is also responsible for the custody solution and the process controls safeguarding the private keys. For the iShares Bitcoin ETP, the Bitcoins are transferred daily from the trading wallet to segregated offline wallets («cold storage»).
There’s a lot of Switzerland in the iShares Bitcoin ETP. BlackRock Switzerland played a key role in its development, said Dirk Klee, Country Head for Switzerland.
The iShares Bitcoin ETP carries a total expense ratio (TER) of 25 basis points, with a temporary reduction to 15 basis points in effect through the end of the year. The underlying Swiss special purpose vehicle (SPV) is exempt from Swiss stamp duty on both purchases and sales.
Blackrock took its time before launching the iShares Bitcoin ETP. Ultimately, it was the evolution of the cryptocurrency space in recent years—combined with growing client demand—that prompted the firm to move forward.
«We believe ETPs can play a key role in building a bridge between crypto and traditional finance, due to their efficiency and ease of use,» said Klee. For investors with appropriate governance frameworks and sufficient risk tolerance, a 1% to 2% allocation to Bitcoin in multi-asset portfolios is justifiable, he added.
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