The ETF provider HANetf, which manages $9.2 billion in assets, has introduced the Arrow Bitcoin EUR Hedged ETF. This product is designed to provide European investors with exposure to bitcoin while mitigating the risks associated with fluctuations in the exchange rate between the US dollar and the euro.
The fund functions as an exchange-traded commodity. Because bitcoin is denominated in US dollars, European investors typically face dual risk from both the asset price and currency volatility. This new financial instrument aims to isolate the bitcoin price performance by removing the currency exposure component.
HSBC serves as the currency hedging provider for the fund. The hedging strategy involves the use of forward contracts to sell the equivalent dollar amount for euros at a fixed future rate. These contracts are subject to monthly rollovers, during which the hedge is resized to maintain its effectiveness.
The launch follows the growth of the broader bitcoin ETF market, particularly in the United States. Since the approval by the Securities and Exchange Commission in 2024, US-based bitcoin ETFs managed by firms such as BlackRock, Fidelity, and Morgan Stanley have accumulated a combined total of $111.1 billion in assets.
