Israel Launched Six BTC Funds Tracking BlackRock’s IBIT
No doubt about it: the world watched closely when the U.S. Securities and Exchange Commission (SEC) approved spot Bitcoin exchange traded funds (ETFs) in January 2024. The best-known of those ETFs is the iShares Bitcoin Trust (NASDAQ:IBIT), which is managed by BlackRock, the world’s biggest asset manager.
Fast-forward to a year later, and Israel jumped into the fray with its own regulatory approval of funds that track Bitcoin and, by extension, BlackRock’s IBIT fund. This was inevitable, given Israel’s tech-forward culture – and yet, the nation’s launch of a half-dozen Bitcoin funds nonetheless marks a milestone moment in the global cryptocurrency wave.
Diving Headfirst into the Crypto Fund Game
Even while Israel remains highly tech-advanced and generally cryptocurrency-friendly, there have been ups and downs in the nation’s adoption and regulation of crypto assets. For example, as reported in Binance’s blog, the Israeli Tax Authority has had difficulty collecting taxes on cryptocurrency transactions; the result has been an estimated loss in potential tax revenue of roughly 3 billion new shekels, or the equivalent of approximately $800 million.
But then, all countries have their speed bumps on the road to cryptocurrency adoption. Indeed, some crypto proponents might contend that the SEC, chaired by Gary Gensler in 2024, took a long and winding path to Bitcoin ETF approval. Ultimately, their approval led the way for launching of options trading for spot bitcoin ETF’s which brought in even more volume to markets. Binance CEO Richard Teng commented on this development, “Options trading is poised to enhance liquidity in the crypto ecosystem by providing investors with additional tools for hedging and speculation. Institutional players, who often seek sophisticated risk-management instruments, may find options particularly appealing. By offering new mechanisms to manage exposure, options trading could attract long-term capital, increasing market stability and broadening participation beyond retail investors.”
Yet, the former SEC chair did finally green-light crypto funds and it was only a matter of time whether a similar watershed event would occur in Israel. Thus, in late 2024, the Israeli Securities Authority (ISA) approved the December 31 launch of six Bitcoin-based funds.
Granted, these aren’t exactly the same as the funds that the SEC approved in the U.S. A notable difference is that BlackRock’s IBIT and the other funds initially approved in America were ETFs, which trade like stocks and have constantly changing prices throughout the day when the financial markets are open for trading.
In contrast, the ISA green-lit six Bitcoin-tracking mutual funds, not ETFs. Unlike ETFs, mutual funds are typically priced only once during any given trading session (though future Israeli Bitcoin-tracking products will likely trade continuously like ETFs do).
Still, it’s not difficult to connect the dots between the success of BlackRock’s ETF in the U.S. and the push to approve similar funds in Israel. The parallels are notable as in both the U.S. and Israel, the long-awaited approval of cryptocurrency funds was the result of a powerful grassroots movement in tandem with the persistent efforts of financial institutions.
The U.S. and Israel Change the Crypto Game
In just a year’s time, the U.S.-based spot Bitcoin ETFs collectively attracted $35.6 billion worth of investor capital inflows. Of course, it’s too early to gauge the long-term success of Israel’s newly approved Bitcoin-based mutual funds.
Currently, there are half a dozen contenders among Israel’s approved BTC mutual funds; the available funds are managed by Migdal Capital Markets, More, Ayalon, Phoenix Investment, Meitav, and IBI. The annual management fees charged by these funds to the investors have a wide range, from 0.25%, up to 1.5%.
Only time will tell which of these Israeli fund managers comes to the forefront like BlackRock did within America’s Bitcoin ETF market. It will be fascinating to see this play out – but at the same time, it’s not a horse race and Israel’s regulatory approval of Bitcoin funds could benefit the crypto community as a whole.
Notably, the Israeli cryptocurrency funds’ approval came at the tail end of 2024, a time when the Bitcoin price was rising rapidly and the global tide seemed to turn in favor of the pro-crypto movement. “It is impossible to argue that the SEC’s approval was one of the reasons that pushed the price of Bitcoin up,” contended Eyal Goren, deputy CEO of IBI Funds.
“As soon as [the SEC] started making the product available to the public, it changed the game,” Goren added. Is it also possible, though, that Israel is changing the global crypto “game” with its own variety of cryptocurrency funds?
It’s certainly conceivable as the newly approved funds, which currently trade on the bustling Tel Aviv Stock Exchange, have the potential to bring hordes of reluctant cryptocurrency investors into the fold. By dipping their toes into the crypto-verse through financial products with the mutual-fund wrapper, some participants will, without a doubt, sooner or later venture into purchases of Bitcoin itself.
Hence, the end result won’t only be the launch of funds tracking BlackRock’s Bitcoin-based product, but a funneling of Israel’s retail and institutional investors into the exciting world of cryptocurrency and the blockchain. So, although the ISA approved six crypto-tracking funds at the end of 2024, Israel will undoubtedly prove to be a global-scale blockchain game changer throughout 2025.
This article was written in cooperation with Joe Thirston