Switzerland Approves First Retail ETF Investing Directly in Bitcoin
Key Facts
The Swiss Financial Market Supervisory Authority approved the first exchange-traded fund available to retail investors that invests directly in bitcoin on 20 October 2026, extending approvals for cryptoasset funds to the public. The fund is classified under Swiss law as an alternative investment fund with special risks, according to the authority's announcement. The regulator granted it an exemption from risk diversification rules, allowing it to invest directly in the cryptocurrency within the approved structure. The authority based the exemption on bitcoin's long trading history and high trading volumes compared with other cryptocurrencies. The approval thus combines retail access, exchange trading of the fund's units and direct investment of its assets in bitcoin.
The new approval follows a Swiss precedent announced on 29 September 2021, when the authority approved the first Swiss cryptoasset fund. Distribution of that fund was restricted to qualified investors, according to the announcement at the time, unlike the new fund available to retail investors. In its statement announcing the earlier approval, the authority said that "distribution of this fund is restricted to qualified investors," defining the pool of investors who could be targeted. The earlier decision concerned a cryptoasset fund, while the current approval covers an exchange-traded fund investing directly in bitcoin. The shift from qualified investors to the public places the new approval at a different stage of investment access through funds governed by Swiss law.
The decision was preceded by exchange-traded bitcoin products with different legal structures, including the "iShares Bitcoin" product, which BlackRock lists as established on 18 March 2025 and domiciled in Switzerland. Its key information document states that its securities are "structured as debt securities rather than units in a collective investment scheme," a legal distinction from the fund approved by the authority. BlackRock rates that product's risk at 6 out of 7, the second-highest level on the scale used in the document. The company also warns that the performance of its securities may differ significantly from that of a direct holding in bitcoin because of the negative effects of fees and costs. The warning concerns the performance of the securities issued by the product compared with holding the currency itself, while the high rating concerns the risks of investing in that existing product.
On asset custody, the Swiss authority's guidance states that direct investments in cryptoassets within Swiss funds are generally held by a Swiss custodian bank. This rule places custody of assets at a Swiss banking institution at the heart of arrangements for direct investment through funds. When external custody providers are used, responsibility for custody remains with licensed financial institutions, according to the authority. In its statement, it said that "responsibility remains with licensed financial institutions when using these providers," underscoring the continuing obligation of the institution engaging an outside party. The custody guidance identifies cyberattacks and inadequate protection of private keys among the operational risks associated with holding cryptoassets, alongside arrangements for institutional responsibility for their custody.
The U.S. market offers a historical precedent for the launch of spot bitcoin products, with the U.S. Securities and Exchange Commission approving their listing and trading on 10 January 2024. Then-SEC Chair Gary Gensler underscored the limits of the decision, saying: "We did not approve or endorse bitcoin." During the debut trading session on 11 January 2024, trading in shares of U.S. bitcoin funds reached $4.6 billion by the afternoon, according to Reuters, citing London Stock Exchange Group data. The amount represented the value of shares traded during the session, rather than net inflows into the funds. In its coverage of the same session, Reuters reported that bitcoin was up 0.77% at $46,303, a move accompanying the U.S. launch of those products.
In Switzerland, the authority accompanied its approval with a warning that investing in bitcoin remains "high risk," even through a fund it has approved. It said the cryptocurrency's volatility could cause a substantial loss of capital value, leaving investors exposed to changes in the asset's price within the licensed structure. The warning accompanies the fund's approval within the category of alternative investments with special risks and its exemption from risk diversification rules. Regarding subsequent products, the authority said in its announcement dated 20 October 2026 that other fund providers had submitted applications to establish exchange-traded bitcoin funds or announced plans to do so. The next steps therefore include reviewing submitted applications, alongside applications announced by providers seeking to establish additional products in the same category.