Israel to launch Bitcoin mutual fund tracking BlackRock's IBIT and other indices

Key Takeaways

Israel will launch six Bitcoin mutual funds through leading fund managers like Meitav and IBI.
The mutual funds will track various indices, such as IBIT BlackRock and S&P, trading on the Tel Aviv Stock Exchange.

Israeli fund managers are set to launch six Bitcoin mutual funds on December 31 after receiving approval from the Israel Securities Authority, according to local news report.

The fund, which trades on the Tel Aviv Stock Exchange, tracks several Bitcoin indices including the BlackRock IBIT, S&P, and Chicago Stock Exchange benchmarks. Fund managers include Meitav, Migdal Capital Markets, IBI, and Ayalon.

While the report mentions the iShares Bitcoin Trust, it is unclear which specific fund tracks this index.

IBI and Meitav will be subject to a 0.25% management fee, with their funds tracking the S&P Bitcoin index and the CME CF Bitcoin Reference Rate, respectively.

Migdal Capital Markets, one of the largest and oldest investment houses in Israel, offers a fund that tracks the Indxx Bitcoin Reference with a fee of 0.25%, while Ayalon's Bitcoin Exposure fund that has actively managed 0.8%.

“It is impossible to argue that the SEC agreement was one of the reasons that pushed the price of Bitcoin up. Once they started bringing the product to the public, it changed the game,” said Eyal Goren, vice president of IBI Funds.

The approval comes after two years of business requests to Israeli regulators, who ordered all approved assets to be launched at the same time. Bitcoin is trading at around $98,000, up 126% since the start of 2024, for CoinGecko.

Industry executives regretted the timing, suggesting that an earlier deal could have gotten more of Bitcoin's value on prices.

The fund provides convenience to investors. It is purchased in shekels within the client's current investment portfolio, eliminating the need for currency conversion, digital wallets, or foreign exchange, according to Eyal Haim, VP of Ayalon Mutual Funds.

“We have recently seen a growing demand from the investment public to invest in digital currency in a managed way through the capital market, and we thank the Israel Securities Authority for the product promotion through a managed instrument,” said Lior Kagan, CEO of Meitav Mutual Funds.

The funds will be available through banks and depositories, although they primarily give exposure to Bitcoin-related index products rather than direct Bitcoin investment. This means that fund returns may not mirror Bitcoin's performance.

Lior Kasharian, CEO of Migdal Mutual Funds, said that the launch of a shekel-denominated mutual fund is good news for Israeli investors, allowing them to easily find this digital asset. .