Why Switzerland’s first genuine spot bitcoin ETF could soon attract overseas banks and brokers
Switzerland's first spot Bitcoin ETF will begin trading on SIX Swiss Exchange in November with a rare exemption allowing it to invest entirely in bitcoin.
The Bitcoin Fund ETF (BBIT) will begin trading on SIX Swiss Exchange in November, though an exact date has not been set. Unlike many European Bitcoin investment products, this fund will keep its Bitcoin holdings separate from its manager's assets, providing different legal protections if the manager encounters financial trouble.
Rare Regulatory Exemption
The Swiss Financial Market Supervisory Authority (FINMA) approved BBIT on Oct. 20, granting a rare exemption from rules requiring investment funds to spread their money across different assets. This allows the fund to invest entirely in bitcoin, a decision justified by bitcoin's long trading history and high trading volumes.
bitcoin's long trading history and high trading volumes helped justify the decision
International Access
Overseas banks and brokers will be able to access the fund, though public sales are approved only in Switzerland. Approximately 90 banks and brokers from Switzerland and abroad participate in the exchange.
International brokers can access the ETF either directly as approved trading participants or indirectly through an existing trading participant, according to Danielle Reischuk, senior ETFs and ETPs sales manager at SIX Swiss Exchange.
International brokers can access an ETF through SIX either directly as approved trading participants, subject to applicable regulatory and technical requirements, or indirectly through an existing trading participant
Investor Protections
Unlike most Bitcoin investment products in Europe structured as debt, BBIT is a regulated investment fund. This structure offers investors different legal protection if the managing company encounters financial trouble.
Retail investors in Switzerland can buy shares in the fund without having to buy or store bitcoin themselves. However, whether customers outside Switzerland can access the fund depends on local regulations, and even Swiss customers may not be able to buy it immediately through their usual banking app.
Future Developments
FINMA confirmed that other companies are seeking approval for similar cryptocurrency funds, though the approval does not automatically clear the way for ETFs holding other cryptocurrencies like ether or solana. The exemption is specific to bitcoin due to its established market characteristics.
This development contrasts with European Union rules, which do not allow conventional retail investment funds to invest directly in bitcoin. Switzerland's approach may influence other financial markets considering cryptocurrency investment products.
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