FINMA approves Switzerland’s first retail bitcoin ETF

Swiss regulator FINMA approved the country’s first exchange-traded retail fund to invest directly in bitcoin on Oct. 20, opening a regulated fund route for public investors, according to FINMA’s announcement. The regulator said it approved the fund to meet growing interest in bitcoin while prioritising investor protection and transparency.

What kind of bitcoin fund did FINMA approve?

It is a Swiss-law fund classified as an “other fund for alternative investments” with specific risks. FINMA said the fund invests directly in bitcoin, making it the first exchange-traded retail fund of its kind approved in Switzerland.

The approval differs from a 2021 FINMA-authorised crypto fund, which was restricted to qualified investors and held a basket of cryptocurrencies. Swissinfo’s report said the new approval opens access to the general public.

What protections and risks apply to investors?

FINMA granted an exemption from applicable risk-diversification rules, citing bitcoin’s longer trading history and higher trading volume compared with other cryptocurrencies. It also said supervised institutions must address operational and custody risks, and fund documents must clearly explain the risks.

The regulator warned that bitcoin investments remain highly risky, including through an approved ETF, and that investors could lose a significant amount of their capital. Firms offering crypto-based financial products must provide clear risk warnings and follow Swiss conduct rules, including suitability checks.

When could investors buy the fund?

FINMA said other fund providers have submitted or announced applications for bitcoin ETFs, but its announcement did not name the approved fund or give a listing date. Those details, including when trading will begin, remain unconfirmed.

Source material

• FINMA’s announcement — finma.ch
• Swissinfo’s report — swissinfo.ch