How European investors can now buy bitcoin without taking on U.S. dollar risk

By CoinDesk9 hours ago Updated

European investors can now gain exposure to bitcoin without having to worry about exchange-rate risks eroding their returns.

London-based asset management platform HANetf has listed exchange-traded commodities (ETCs) that provide exposure to bitcoin while hedging swings in the pound sterling and euro against the U.S. dollar, HANetf said in an emailed announcement on Wednesday.

Multinational bank HSBC is providing the currency hedging for the products.

“These are the the world’s first currency-hedged crypto ETCs, bringing a new currency hedged structure to the European crypto ETC market,” HANetf said in Wednesday’s announcement.

Unlike in the U.S., ETFs in the European Union (EU) and U.K. must hold a diversified basket of assets. ETCs, therefore, exist to provide exposure to a single commodity or commodity group.

HANetf’s Arrow Bitcoin GBP Hedged ETC (GBTC) lists on the London Stock Exchange while its euro counterpart (EBTC) lists on Frankfurt-based Xetra and Euronext Paris.

They are designed to address an inherent aspect of bitcoin that also applies to gold: it’s almost universally denominated in U.S. dollars. This means investors in markets like Europe and elsewhere also take on dollar exposure when investing in BTC.

HANetf is targeting investors who want long-term exposure to bitcoin, but may be concerned about potential dollar weakness.

Currency-hedged gold ETCs are already a $23 billion asset class, approximately 13% of the gold ETC market in Europe, with HANetf providing products that hedge the euro, pound and Swiss franc.

Cryptocurrency exchange-traded products (ETPs) - the umbrella term for ETFs, ETCs and exchange-traded notes (ETNs) - are a predominant vehicle for attracting investors to digital assets, giving them exposure to crypto without the worry of managing custody of the assets themselves.

Investors more accustomed to traditional financial (TradFi) assets may demand products and services that replicate what they use in TradFi, and HANetf’s GBTC and EBTC are the latest examples.