Israel is set to expand its cryptocurrency investment offerings with the launch of six Bitcoin-tracking funds, approved by the Israel Securities Authority. Beginning December 31, these funds will be available for purchase through banks and investment firms, marking a significant milestone for the country’s crypto sector.
How the Funds Work
The funds will mirror Bitcoin’s price movements using a range of indexes and strategies. Among them, some will track major Bitcoin-focused exchange-traded funds (ETFs) from the United States, including BlackRock’s iShares Bitcoin Trust ETF (IBIT). Notably, one of the funds will be actively managed, aiming to outperform Bitcoin’s market performance.
Local mutual fund managers behind the initiative include Phoenix Investment, IBI-Kessem, Meitav, More, Ayalon, and Migdal. Management fees are set to range between 0.25% and 1.5%. For now, trades will be executed once daily, reflecting Bitcoin’s price at that specific moment.
Eyal Haim, Vice President of Ayalon Mutual Funds, highlighted the firm’s ongoing efforts to enter the digital asset space. “We launched a mutual fund that focuses on companies in the field, recognizing that their value is closely tied to the performance of digital currencies,” he told *Calcalist*.
The global market capitalization of Bitcoin ETFs currently stands at $143.2 billion as of December 25. By introducing Bitcoin-tracking funds locally, Israeli investors can now gain exposure to the cryptocurrency through their domestic fiat currency, the shekel. This step represents a growing interest in providing institutional-grade crypto products in the region.
Israel’s Broader Crypto Strategy
The approval for Bitcoin-tracking funds comes as Israel accelerates its efforts to explore digital currencies. Since May, the country has been working on a central bank digital currency (CBDC) initiative, the digital shekel. Through the Digital Shekel Challenge, the Bank of Israel is inviting developers to create real-time payment systems using the CBDC within a sandbox environment.
One of the project’s key goals is to foster competition with local banks. However, concerns over privacy have been raised, despite public support for the initiative.
With the launch of Bitcoin-tracking funds and its CBDC project, Israel is positioning itself as a forward-thinking player in the digital currency landscape, balancing innovation with regulatory oversight.
