BlackRock secures UK’s FCA approval for Bitcoin ETP launch

BlackRock has received approval from the UK’s top financial markets regulator, the Financial Conduct Authority, to operate as a crypto asset firm. 

According to an Apr. 1 report from DL News, the global investment giant managing around $12 trillion in assets will now be able offer its new European Bitcoin (BTC) exchange-traded product in the UK. With this approval, BlackRock joins companies like Coinbase, PayPal, and Revolut as the 51st company to be registered with the FCA. 

Only 14% of applications have been approved by the FCA, demonstrating its selectiveness. According to the agency, a large number of applications were turned down because of missing or poor-quality information.

The iShares Bitcoin ETP, marketed under the ticker IB1T, started trading last week on Euronext Paris and Amsterdam. It launched with a temporary fee waiver, lowering its expense ratio to 0.15% until the end of 2024. After that, the fee will rise to 0.25%, aligning with CoinShares’ $1.3 billion physical Bitcoin ETP, the largest in Europe. 

With each share backed by real Bitcoin that Coinbase holds in custody, the product gives investors direct exposure to Bitcoin. BlackRock’s action follows the success of its iShares Bitcoin Trust, or IBIT, which is listed in the United States. IBIT has amassed more than $48 billion in assets since its inception, as per data from VettaFi.

IB1T uses a similar structure to give European investors a regulated way to gain exposure to Bitcoin without actually holding the currency. The ETP is issued through a Swiss-based special-purpose vehicle to ensure compliance with European financial regulations. 

The entry of BlackRock into Europe indicates that demand for Bitcoin investment products is rising outside of North America. CEO Larry Fink recently warned that rising U.S. debt could weaken the dollar’s dominance and possibly strengthen Bitcoin’s case as a store of value.

As reported by Crypto.news on Mar 31, Fink pointed out in his annual letter that investors may turn to Bitcoin as a safer option as a result of excessive government expenditure.