Swiss regulator FINMA has approved the first individual investor ETF that invests directly in Bitcoin; the fund’s name and issuer have not been disclosed.
The Swiss Financial Market Supervisory Authority (FINMA) has approved the first spot Bitcoin ETF to be offered to individual investors in the country. The new product will allow direct investment in Bitcoin and will operate under Swiss investment fund regulations.
Swiss exchanges have previously offered exchange-traded products (ETPs) linked to Bitcoin and Ethereum. However, most existing ETPs were legally structured as debt instruments. The newly approved ETF, however, will be subject to mutual fund regulations. This structure imposes different obligations in terms of custody, operational risks, investor information, and standards of conduct to be applied during the sale.
FINMA stated that Bitcoin has a longer transaction history and a much higher market capitalization compared to most other cryptocurrencies. Citing these characteristics, the regulator granted an exception to the general rule requiring funds to diversify their investments. This allowed the fund to focus directly on Bitcoin instead of spreading its investments across different assets.
The name of the approved fund and the company that will issue it have not yet been announced. FINMA stated that it does not share private information with institutions, but noted that other fund providers have also submitted Bitcoin ETF applications or announced plans to apply. Therefore, the approval does not mean that the product will immediately begin trading on exchanges.
FINMA also stressed that the decision does not eliminate the risks associated with Bitcoin investment. Fund documents will need to clearly explain price volatility, custody issues, and operational risks. According to the regulator, investors could lose a significant portion of their investments due to sharp fluctuations in Bitcoin.
*This is not investment advice.
Continue Reading: Historic Approval for Bitcoin (BTC) from Switzerland: Opening the Way for Individual Investors