A new Bitcoin exchange-traded fund has launched in Europe, but it has one particular feature.

This Arrow Bitcoin EUR Hedged ETF product, launched by the $9.2 billion ETF provider HANetf, enables European investors to gain exposure to Bitcoin while mitigating the impact of exchange rate fluctuations between the euro and the US dollar.

Since Bitcoin is priced in US dollars, European investors who purchase unhedged products are actually exposed to two types of risks: fluctuations in Bitcoin prices and changes in the exchange rate between the US dollar and the euro.

This new exchange-traded product – namely, funds that provide investors with exposure to commodities – is designed to eliminate the second of these risks. HANetf describes it as a globally pioneering product.

HANetf, co-founder and co-CEO, Hector McNeil, stated in a declaration: "With this launch, we are bringing the mature logic of euro hedging ETF to the crypto market."

"Investors have long understood that exchange rate fluctuations can have a significant impact on the returns of different asset classes, such as gold."

Similar to gold, Bitcoin is priced in US dollars, which means that European investors may ultimately be betting on two things at the same time: Bitcoin itself, as well as the US dollar.

HSBC will provide currency hedging for this product. Typically, the operation of euro hedge funds involves banks entering into forward contracts to sell euros equivalent to a certain amount of dollars at a fixed exchange rate on a future date.

If the US dollar weakens against the euro later on, the losses of Bitcoin in euros will be offset by the gains from the forward contracts, and vice versa. These contracts are usually renewed monthly, and the hedging scale is also readjusted at the time of renewal.

Since the U.S. Securities and Exchange Commission approved Bitcoin in 2024, such products have achieved great success in the United States.

These products are managed by institutions such as BlackRock, Fidelity, and Morgan Stanley. They allow investors to purchase shares that track the price of Bitcoin, without the need to store cryptocurrencies themselves.

According to Coinglass data, these funds currently manage a total of $111.1 billion in assets, thanks to the most successful issuance in ETF's history.