FINMA approves Switzerland’s first retail fund to invest directly in Bitcoin

Switzerland’s financial regulator has approved the country’s first retail fund that can invest directly in Bitcoin, a step that brings direct Bitcoin exposure for Swiss retail investors into the regulated fund framework rather than the exchange-traded product structures that have so far dominated the market. In a statement Tuesday, the Swiss Financial Market Supervisory Authority, or FINMA, said it “has approved the first retail fund to invest directly in Bitcoin.”

FINMA said the vehicle was approved under Swiss fund law as an “other fund for alternative investments” under the Collective Investment Schemes Act, or CISA. The regulator also granted a waiver from normal risk-diversification rules, saying, “Bitcoin has a long trading history and a particularly high trading volume compared with other cryptocurrencies.” At the same time, FINMA said any supervised institutions involved with such a fund must address operational and custody risks, pointing to its January guidance on the custody of crypto-based assets as the standard to follow.

The regulator paired the approval with a clear warning about the asset itself. “The market risk associated with Bitcoin remains very high,” FINMA said, adding that “investments in Bitcoin – even through an approved ETF – remain highly risky.” FINMA also stressed that retail distribution must comply with Switzerland’s Financial Services Act, or FinSA, including conduct rules at the point of sale and clearer risk warnings for investors.

The approval stands out because Swiss investors already had access to Bitcoin exposure through exchange-traded products, including physically backed products listed on Swiss exchanges. But those products are generally not the same as a Swiss collective investment fund authorized under CISA. The significance of Tuesday’s decision is that direct Bitcoin exposure has now been allowed inside the country’s regulated retail fund regime.

FINMA had previously approved a Swiss crypto fund for qualified investors only in September 2021. This latest decision is different because it opens that structure, at least in this case, to retail investors. FINMA also said other fund providers have submitted or announced applications for Bitcoin ETFs, indicating that the approval comes as competition for regulated Bitcoin products in Switzerland broadens.

Still, FINMA’s announcement was narrowly focused on the regulatory decision itself. The regulator did not identify the fund manager or issuer, the legal name of the fund, any ISIN, a listing venue, the custodian, the fee level or the first trading date. Without those details, the immediate significance of the move is legal and regulatory: Switzerland has now approved its first retail fund allowed to invest directly in Bitcoin, while making clear that the product remains subject to strict custody, conduct and risk-disclosure requirements.