BlackRock has secured approval from the UK’s financial markets authority, the Financial Conduct Authority, to operate as a crypto asset firm.
As reported on April 1, the global investment powerhouse, which manages approximately $12 trillion in assets, is now set to introduce its new European Bitcoin (BTC) exchange-traded product in the UK. With this green light, BlackRock joins the ranks of companies such as Coinbase, PayPal, and Revolut, becoming the 51st firm registered with the FCA.
The FCA has approved only 14% of the applications it has received, highlighting its rigorous selection process. The agency noted that many applications were declined due to either inadequate or substandard information.
The iShares Bitcoin ETP, trading under the ticker IB1T, began its activity last week on Euronext Paris and Amsterdam. It launched with a limited-time fee waiver that reduces its expense ratio to 0.15% until the end of 2024. Subsequently, the fee will increase to 0.25%, matching CoinShares’ $1.3 billion physical Bitcoin ETP, currently the largest in Europe.
This product, with each share backed by actual Bitcoin held in custody by Coinbase, provides investors with direct exposure to Bitcoin. BlackRock’s initiative follows the notable success of its iShares Bitcoin Trust, or IBIT, which is listed in the United States and has attracted over $48 billion in assets since its launch, according to data from VettaFi.
IB1T employs a similar structure that allows European investors a compliant means to gain exposure to Bitcoin without the need to hold the currency itself. The ETP is issued via a Swiss-based special-purpose vehicle, ensuring adherence to European financial regulations.
BlackRock’s entry into the European market suggests an increasing appetite for Bitcoin investment products beyond North America. CEO Larry Fink recently cautioned that rising U.S. debt could undermine the dollar’s supremacy, potentially enhancing Bitcoin’s appeal as a store of value.
As noted earlier, Fink highlighted in his annual letter that the current trajectory of government spending might prompt investors to consider Bitcoin as a more secure alternative.