Grayscale Eyeing Expansion into European Market

The world’s largest digital asset manager, Grayscale, is gearing up for expansion into the crowded European market.

According to the CEO, Michael Sonnenshein, the company is negotiating with several potential European partners to launch a series of pilot projects in different countries. 

“Although the EU is unified, we don’t view the entire European market as, in fact, one market,” said Sonnenshein. 

“Instead, we’re going to be very thoughtful, very methodical about each of the financial centers and financial hubs that we ultimately launch in because we recognize the differentiation of investor behaviors and attitudes and of regulatory regimes.”

Europe’s ETP market is flourishing

The European market consists of many ETP products, which allow exposure to crypto-asset markets without exposure to their inherent volatility. According to Bloomberg data, the ETP market in Europe is worth $7.1 billion, with over 80 crypto ETP offerings, 60 of which were launched before 2022. The first crypto ETP product was launched in Europe five years ago.

Valour, a Swiss company, recently launched two ETPs, Valour Terra and Valour Avalanche, on the Nordic Growth Market. Fidelity International, which broke ground on making it possible to add cryptocurrencies to a 401(k) portfolio, launched the Fidelity Physical Bitcoin on the Deutsche Börse in Germany and the SIX Exchange in Switzerland. 

WidomTree launched three crypto ETPs on the same exchanges as Fidelity, backed by Cardano, Solana, and Polkadot, last month, with plans for a French and Dutch listing. 

FTX and CoinShares recently listed a Solana exchange-traded product on the Xetra exchange in Germany via FTX’s new institutional unit, FTX Access. And Canada, which approved Purpose Bitcoin ETF last year, is home to 17 ETPs, the U.S. three, and Latin America 17.

Grayscale has no luck across the pond yet

Grayscale has, however, been so far unsuccessful in launching a spot bitcoin ETF in the United States. It is engaged in a well-reported battle with the Securities and Exchange Commission (SEC) in the U.S. over converting its $30 billion Grayscale Bitcoin Trust into a spot bitcoin ETF. 

Such approval would likely speed up investment in crypto funds, to the tune of $120 billion, by 2028, Bloomberg Intelligence has found.

The SEC has said it will rule on the matter in July 2022. Should it deny the application, Sonnenshein has indicated that Grayscale would consider legal action against the agency.