European Bitcoin ETFs Experience $500 Million Losses Since January

European Bitcoin ETFs Experience $500 Million Losses Since January


By Andrew Throuvalas
Last updated:
May 30, 2024 21:09 EDT
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2 min read


Despite the growing demand for Bitcoin in recent months, European Bitcoin spot ETFs have suffered significant losses, while their counterparts in the United States have thrived.
European Bitcoin ETFs Face Financial Losses
According to data from Morningstar, European Bitcoin spot ETPs have experienced net outflows of $500 million since the beginning of the year, as reported by the Financial Times.
In contrast, “crypto” ETPs for altcoins like Ether have only seen $42 million in net inflows during the same period, failing to compensate for the losses incurred by the more established Bitcoin ETFs.
Interestingly, Bitcoin’s price has increased by 54% during this time, indicating that the demand for Bitcoin remains strong globally. Pierre Debru, the head of quantitative research and multi-asset solutions at WisdomTree, stated that client interest in European Bitcoin investment products has significantly risen since January.
This surge in interest coincided with the approval of Bitcoin spot ETFs in the United States, granting easier access to spot Bitcoin price exposure for institutional investors. Since their launch on January 11, these US funds have collectively attracted $13.6 billion in net inflows, with BlackRock and Fidelity’s Bitcoin trusts leading the way.
Notably, these two funds charge exceptionally low annual management fees of just 0.25%, significantly lower than their competitors abroad. Consequently, Debru noted that the US ETFs have created a new fee environment in Europe, compelling providers in the region to reduce costs to remain competitive.
The Necessity of a Bitcoin ETF Fee Battle
In contrast, those that have resisted lowering fees have experienced ongoing losses. The most prominent example is the Grayscale Bitcoin Trust (GBTC), another US fund that converted into a Bitcoin ETF in January, charging a 1.5% fee.
Despite initially holding over 630,000 BTC, the fund has now lost over half of its Bitcoin holdings, and BlackRock has surpassed it as the world’s largest Bitcoin ETF.
Similarly, Canada’s Purpose Bitcoin ETF (BTCC), which was the first and largest in the world prior to January, currently holds only 27,052 BTC compared to 35,706 BTC on January 5. The fund charges a 1% management fee.
According to Martijn Rozemuller, the CEO of VanEck’s European business, the company’s local Bitcoin and Ethereum ETNs have seen modest net inflows since January. VanEck was one of the ten companies that launched Bitcoin funds in the United States in January.
“In terms of the total potential market size, European crypto ETPs are still relatively larger than the spot Bitcoin ETFs in the US,” Rozemuller told FT.
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