Israeli institutions to launch Bitcoin tracking funds

In the past year, Bitcoin has again become a focus of interest in the financial world, as its price rose 113% to a current $94,200. Now, for the first time, the Israeli public will be able to invest in shekels in a product that tracks Bitcoin. Four mutual fund managers (IBI-Kessem, Meitav, More, and Migdal) have filed prospectuses for the launch of funds tracking Bitcoin next week. Ayalon has filed a prospectus for a managed fund. Publication of the prospectuses became possible after the Israel Securities Authority consented to the move last week.

The tracking funds will not at present be traded continuously. Buy and sell orders will be executed once a day. Market sources say that in the future funds will be launched that will track the price of Bitcoin (or overseas indices invested in it) continuously throughout the day, so that it will be possible to trade at any time during the session.

The roots of the change introducing the digital currency into the mainstream of the Israeli capital market lie in the regulatory change in the US earlier this year, when the US Securities and Exchange Commission allowed investment houses there to set up ETFs tracking Bitcoin as an underlying asset, and not just futures contracts on its price as was the case previously.

Bitcoin, which is characterized by high volatility, has recently benefitted from a following wind in the form of declarations by US president-elect Donald Trump in favor of cryptocurrencies during his election campaign.

In April this year, the Israel Securities Authority allowed mutual funds to file prospectuses for investment in futures contracts on Bitcoin and Ethereum through tracking funds. In August, it took a step further and allowed non-bank members of the Tel Aviv Stock Exchange to provide trading and custody services in these currencies.

Published by Globes, Israel business news – en.globes.co.il – on December 24, 2024.

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