Bitcoin ETPs

YEREVAN ( — European Bitcoin exchange-traded products (ETPs) have experienced outflows all across 2024, according to Morningstar data. It reveals that European Bitcoin ETPs have lost $506 million since the start of the year. Conversely, other crypto ETPs have seen modest net inflows of $42 million.

European Bitcoin ETPs Face $506M Outflow - Source: Financial Times (via DexBot)
European Bitcoin ETPs Face $506M Outflow. Source: DexBot

During this period, Bitcoin’s price has risen by approximately 40%. However, this increase hasn’t been enough to prevent the outflows from European Bitcoin ETPs. Providers had hoped the approval of spot Bitcoin ETFs in the U.S. would positively impact the European market, but this hasn’t happened.

U.S. Spot Bitcoin ETFs Affect European Market Dynamics

The U.S. financial regulator approved the launch of spot Bitcoin ETFs in January, leading to $13.4 billion of inflows. This contrasts with the situation in Europe, where the approval of these ETFs has created a new fee environment. U.S. Bitcoin ETFs typically have lower fees, pressuring European issuers to reduce their charges.

Pierre Debru, head of quantitative research and multi-asset solutions at WisdomTree, highlighted the increase in client queries for European crypto ETPs since the U.S. launches. However, this interest has not yet resulted in significant inflows. He noted that several asset managers, including WisdomTree, Invesco, and CoinShares, have slashed fees on their Bitcoin ETPs to remain competitive.

Is Bitcoin Halving Impacting ETP Demand?

Monika Calay, director of U.K. manager research at Morningstar, emphasized the complexity of understanding short-term Bitcoin fund flows. She stated,

“Market sentiment remains fragmented. Some view it as an inflation hedge, others see it as a novel currency, and many consider it alongside other high-risk assets.”

The recent Bitcoin halving event, which reduced the rate at which Bitcoin is issued, is seen as a significant factor that could impact Bitcoin ETP flows.

Calay added,

“Historically, such halving events have led to supply shocks, sparking both increased interest and speculation within the crypto community.”

The halving event has been a focal point for many investors, and its long-term effects are still being closely watched.

VanEck Reports Small Gains After U.S. Approval

VanEck, a US-headquartered ETF provider, has also observed the effects of the U.S. approval decision on its European business. Martijn Rozemuller, CEO of VanEck’s European operations, reported small net inflows into its Bitcoin and ethereum exchange-traded notes this year. These inflows have been particularly notable around the time of the U.S. approval decision and during recent months of price recovery for Bitcoin and other crypto assets.

Morningstar data shows that VanEck’s European digital assets ETNs have achieved net inflows of €8.5 million in 2024, with assets rising to €650 million. Rozemuller commented on the potential market size, noting that European crypto ETPs, with assets of $6.4 billion at the end of April, are still relatively large compared to the $53.5 billion in the United States.

The European Bitcoin ETP market faces challenges despite a rising interest in digital assets and competitive adjustments. The influence of U.S. market developments and regulatory decisions will likely play a crucial role in shaping the future dynamics of European crypto investments.

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