HANetf Debuts Euro-Hedged Bitcoin ETF in Europe
HANetf has launched the first euro-hedged Bitcoin exchange-traded fund (ETF) in Europe. This new product, called the Arrow Bitcoin EUR Hedged ETF, gives European investors exposure to bitcoin while reducing the impact of movements between the euro and US dollar.
Bitcoin is priced in dollars, making it a two-fold risk for European investors who buy an unhedged product: they're exposed to both the bitcoin price and the dollar's moves against the euro. The new ETF aims to remove this second risk by providing currency hedging through HSBC.
The fund uses forward contracts to sell the equivalent dollar amount for euros at a fixed rate on a future date, which means that if the dollar weakens against the euro, the loss on the bitcoin's euro value is offset by a gain on the forward. These contracts are rolled monthly and resized when they roll.
HANetf's co-founder and co-CEO, Hector McNeil, stated that 'investors have long understood that currency movements can have a meaningful impact on returns on different asset classes.' He noted that euro-hedged funds work similarly to those for gold, another commodity priced in dollars.