FAQ

What are the cost advantages of investing in an ETF?

In the case of digital assets, an Exchange Traded Fund (ETF) allows investors to buy and sell new financial instruments more easily. It offers investors the opportunity to integrate digital assets into their existing portfolios without requiring specialist knowledge or technical expertise. 

There are two types of funds available on exchanges:

  • A closed-end fund or trust is comprised of a fixed number of shares. Fund shares can trade at a premium or discount to the price of the underlying digital assets. Unit trusts are not traded on traditional regulated markets and typically have high fees. Lengthy notice periods for liquidating funds are common.
  • An open-ended fund, like an ETF, can create additional units for investors by buying more of the underlying asset. Underlying assets are priced in real-time, with the ability to buy and sell at any time. Open-ended funds have the advantage of being regulated and insured, making them more secure for investors.

ETFs provide a safe solution to invest in new financial instruments with ease.

What is the difference between an ETF and other exchange traded products?

There are several exchange traded products which allow investors to trade cryptocurrencies. For example, trusts, leveraged debt tracker funds, Exchange Traded Notes (ETN) and Exchange Traded Commodities (ETC) are all commonly grouped as Exchange Traded Products (ETP).

There are four main areas where ETFs differ from ETPs:

  • Structure: ETFs trade like any other equity-like instrument, whereas other products are made up of derivatives that can be leveraged. This leads to significant counterparty risk. The Jacobi Bitcoin ETF cannot be leveraged and cannot use derivatives like other exchange traded products.
  • Settlement: ETFs are centrally cleared and settled into a Central Securities Depository. ETNs and other ETPs are not centrally cleared and are often leveraged as debt instruments.
  • Regulation: The Jacobi Bitcoin ETF is a regulated product, traded through regulated bodies to keep investments secure. Other exchange traded crypto products are not regulated or governed and have no regulatory restrictions through the trading process.
  • Liquidity: ETF prices are set in real-time and can be traded instantly on exchange. Other products like ETNs are often not priced in real-time. Firms can have redemption limitations making it difficult to exit investments quickly.

Some firms issuing ETNs have been using terms like ‘engineered like an ETF’ which may be misleading. At Jacobi Asset Management, transparency is a core component of our product development and market communication. We are delivering against our mission to provide trusted solutions underpinned by robust, regulated and well-understood frameworks.

Why invest in a Bitcoin ETF over investing in bitcoin directly?

The Jacobi Bitcoin Exchange Traded Fund (ETF) is a fully regulated and centrally cleared bitcoin product, wholly invested in Bitcoin.

Investors can now integrate bitcoin into their portfolios, eliminating the hassle and risks of acquiring, transferring, securing and storing bitcoin directly. As an open-ended Bitcoin ETF, Jacobi offers the simplest and safest place for institutional, professional and sophisticated investors to access bitcoin.

Investing directly into any cryptocurrency requires specialist knowledge and technical expertise. With an ETF, investors no longer need to navigate the complexity of exchanges, wallets and keys. Like real-world wallets and keys, if these elements are lost, the investor risks losing access to their funds. Millions of dollars of bitcoin have been lost due to misplaced wallets or keys.

When investing in an ETF, investors hold units, similar to investing in stocks and shares. The ETF stores bitcoin independently through specialist registrars, adding a layer of security and insurance.

Do investors need a wallet or key to invest in a Bitcoin ETF?

Investors do not need a wallet or key to own units in the Jacobi Bitcoin ETF.

Jacobi Asset Management has consciously set out to create a walletless investment environment. We aim to provide a safe and simple option for institutional, professional and sophisticated investors to access this new digital asset class. Investors will gain exposure to Bitcoin’s performance, avoiding all acquisition, transfer, storage and security risks. Instead, investors can focus on the price of the underlying asset and their investment.

Will investors actually own the bitcoin?

Investors will own units in the Jacobi Bitcoin ETF. 

Jacobi Asset Management will then use the proceeds into the ETF to purchase bitcoin. The bitcoin is settled and securely stored by Fidelity Digital AssetsSM

Why did Jacobi Asset Management start with a Bitcoin ETF?

Jacobi Asset Management’s mission is to champion a world where investors can simply and securely embrace the exciting opportunities of the digital economy without the associated counterparty and technology risks.

Bitcoin is the largest of all cryptocurrencies with the highest demand and the highest level of risk, so it is a natural place for us to start our journey. The Jacobi Bitcoin ETF is the only regulated and centrally cleared crypto product in Europe. 

We plan to launch additional crypto-backed funds to the Jacobi Asset Management family. The Bitcoin ETF is just the beginning.

How is the Jacobi Bitcoin ETF regulated?

The fund is authorised and regulated by the Guernsey Financial Services Commission (GFSC), the competent authority for the finance industry in the British Crown dependency of the Bailiwick of Guernsey.

Who are the custodians of the Jacobi Bitcoin ETF?

Fidelity Digital AssetsSM has been appointed as the custodian for the underlying bitcoin assets of the Jacobi Bitcoin ETF.

Fidelity Digital Assets, Ltd. is temporarily registered with the FCA under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 as a crypto-asset business, pending the determination of the application by the FCA.

 

What is the level of protection for investors of the Jacobi Bitcoin ETF?

Investors will benefit from the same level of protection as any other ETF or security that is centrally cleared and held in a securities depository. The Jacobi ETF units are held at highly regulated European CSD Euroclear. The underlying bitcoin assets are custodied with Fidelity Digital AssetsSM, an enterprise-grade custody platform.

Who can invest in the Jacobi Bitcoin ETF?

The Jacobi Bitcoin ETF is available to institutional, professional and sophisticated investors only.

What is the investment process?

There are two avenues for institutional, professional and sophisticated investors to access the Jacobi Bitcoin ETF:

Off-market through direct investment: Investors can register their details here to invest directly into the Fund.

On Exchange: Jacobi Asset Management are awaiting UK Listing approval from the Financial Conduct Authority for the Jacobi Bitcoin ETF to be listed on CBOE Europe.

Where are the ETF units settled?

All units in the ETF settle via Crest. For more information consult your broker.

What are the fund’s charges?

Jacobi Bitcoin ETF carries a 1.5% total expense ratio. This covers management, administration and all operational fees including the cost of safe custody. All Jacobi Asset Management fees are completely transparent.

 

What price will be used to calculate the NAV of the ETF?

The Jacobi Bitcoin ETF will be using LUKKA pricing data, the firm responsible for creating the S&P Bitcoin Price Index.

OPUS fund services calculate the daily NAV.

What is the redemption penalty and lock up period?

There is no penalty for redeeming Jacobi Bitcoin ETF units. There is also no lock-up period involved in investing in the Jacobi Bitcoin ETF.

How do investors redeem their investment?

Jacobi Bitcoin ETF units can be sold in real-time when listed on-exchange.

Please contact Jacobi Asset Management at [email protected] to redeem off-exchange. 

What is the minimum investment required?

There is a US$100,000 minimum for investors to access the Jacobi Bitcoin ETF.

Can investors redeem ETF units for Bitcoin?

Jacobi Bitcoin ETF investors will only be able to sell Bitcoin ETF units back to USD. 

Can investors obtain EFT units in other currencies?

ETF units are denominated in USD only.