Bitcoin
European Bitcoin ETPs Suffer Rising Outflows
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European bitcoin exchange-traded products have suffered outflows every month this year, despite vendors’ hopes rising following the approval of spot bitcoin ETFs in the US.
European-domiciled Bitcoin ETPs have bled $506 million since the start of this year, while other crypto ETPs have attracted small net inflows of $42 million, Morningstar data shows. The price of bitcoin increased approximately 40% during this period.
The findings come as crypto product providers look to capitalize on institutional demand for digital assets, with the UK regulator approving the first listings of bitcoin ETPs on the London Stock Exchange.
The European outflows contrast with inflows of $13.4 billion enjoyed by crypto products domiciled in the US, where the financial regulator approved the launch of spot bitcoin ETFs for the first time in January.
This article was previously published by Set Europe on firea title owned by the FT Group.
Pierre Debru, head of quantitative research and multi-asset solutions at WisdomTree, said the number of client inquiries about European crypto ETPs has “increased a lot” since the US launch, but this has not yet translated into large inflows.
Debru added that the low fees charged by US bitcoin ETFs “have created a new fee environment in Europe,” forcing European issuers to reduce their fees.
WisdomTree was one of several asset managers to reduce fees on its bitcoin ETPs following US launches, along with Invesco and CoinShares.
Monika Calay, head of UK management research at Morningstar, said understanding short-term bitcoin fund flows this year is “not a straightforward task” and that market sentiment “remains fragmented.”
“Some see it as a hedge against inflation, others see it as a new currency and many consider it alongside other high-risk assets,” she said.
Calay added that the recent bitcoin halving, which saw bitcoin’s issuance rate halved to maintain its scarcity, was a “significant event” in cryptocurrency history that could “significantly impact” bitcoin’s ETP flows.
“Historically, these halving events have led to supply shocks, generating greater interest and speculation within the crypto community, [but] May has already seen a demonstration,” she said.
“As the narrative around bitcoin evolves, market participants must navigate the complexities and uncertainties surrounding this unique asset class,” she added.
US-based ETF provider VanEck said at the time the US spot bitcoin ETFs were launched that it planned to be “more aggressive” in marketing its crypto products in Europe following the US launches.
Martijn Rozemuller, CEO of VanEck’s European business, said his company has seen a small net inflow into its bitcoin and ethereum exchange-traded notes this year.
These inflows occurred especially in the period of the US approval decision and in recent months, where bitcoin and other crypto assets have shown “significant price recovery,” he said.
The company’s European digital asset ETNs saw net inflows of €8.5 million in 2024, with assets rising to €650 million, according to Morningstar data.
“Considered the total size of the potential market, European crypto ETPs are still relatively larger than US spot bitcoin ETFs,” said Rozemuller.
Bitcoin ETPs in Europe managed assets of $6.4 billion at the end of April, while in the US funds have assets totaling $53.5 billion, Morningstar data shows.
*Ignites Europe is a news service published by FT Specialist for professionals working in the asset management industry. Trials and subscriptions are available at igniteseurope. with.