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The Swiss Financial Market Supervisory Authority FINMA announced on October 20th that it has approved the country's first retail exchange-traded fund (ETF) that directly invests in Bitcoin.
FINMA also exempted this fund from the risk diversification rules, on the grounds that Bitcoin has a longer trading history and particularly high trading volumes compared to other cryptocurrencies.
Regulators stated: 'Due to Bitcoin's long trading history and particularly high trading volume compared to other cryptocurrencies, FINMA has approved an exemption to the applicable risk diversification rules in this case.'
FINMA approved an encrypted fund, Crypto Market Index Fund, in September 2021, but at that time, the sales were limited to qualified investors only, not the general public. This fund mainly invests in a basket of crypto assets, not just Bitcoin.
According to the guidelines issued by FINMA on January 12, 2026, institutions under its supervision are required to reduce operational and custody risks. The guidelines identify cyberattacks and inadequate protection of private keys as operational risks. Private keys are cryptographic credentials that control access to cryptocurrencies.
According to these guidelines, Swiss custodian banks are generally required to hold Bitcoin for Swiss funds. Custodian banks may also delegate the custody responsibilities to third-party custodian institutions, either domestic or foreign, but such institutions must be subject to the same level of financial stability regulation and must provide the same level of bankruptcy protection for crypto assets. In other words, if the custodian institution goes bankrupt, these bitcoins can be separated from its bankruptcy assets.
Institutions selling this fund must comply with the rules of conduct stipulated by Swiss financial services legislation during the sales process. This means that they are required to clearly inform customers about the risks of volatility and potential losses, as well as to verify whether the product is suitable for the buyers. FINMA indicates that this provides additional protection compared to directly purchasing cryptocurrencies.
Cryptocurrency exchange trading products already have listing rules on two Swiss exchanges. The guidelines from January of this year FINMA classified them as structured products under the Financial Services Act. However, what has been approved this time is different; it is an investment fund under the Swiss Fund Law.
US spot Bitcoin ETF tracks Bitcoin prices and is traded in brokerage applications just like stocks. According to the ETF tracker from Decrypt, these products saw a cumulative net outflow of approximately $615 million as of last Friday in October. Among the 12 largest funds, BlackRock's IBIT had net assets of $66.37 billion and attracted $665.2 million in inflows on Monday, which was also the only product to record a net inflow that day. The total net inflow for that day was $526.6 million.
The announcement with the FINMA identifier did not specifically mention this Swiss fund or its issuer, nor did it provide a listing date. Regulatory authorities only stated that other institutions have already submitted or announced applications for Bitcoin ETF.
