The Swiss Financial Market Supervisory Authority FINMA has, for the first time, approved an exchange-traded retail fund that invests directly in Bitcoin. As a result, Switzerland now has a Bitcoin ETF with fund status, made possible by an exemption from the risk diversification rules.
FINMA supervises banks, insurers and funds, among others, and approves collective investment schemes that pool the money of many investors. An ETF is one such fund: it trades continuously on an exchange and tracks an underlying asset. In the new product, that underlying is Bitcoin, which the fund holds directly. Investors buy fund units and therefore do not have to keep Bitcoin in custody themselves. The regulator had already approved the first Swiss crypto fund in 2021, but only for qualified investors. The new fund, on the other hand, is a retail fund and is therefore also open to private investors. Legally, it falls into the same category as the 2021 crypto fund: "other funds for alternative investments" with special risk. Yet FINMA does not name the provider.
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Fund status separates the ETF from earlier Bitcoin products
On SIX, exchange-traded Bitcoin products have so far taken the form of exchange traded products (ETPs). Legally, they are structured products, meaning debt instruments without fund status. Anyone who buys an ETP holds a claim against the issuer and so carries issuer risk. The new ETF, by contrast, is a collective investment scheme under the Collective Investment Schemes Act (CISA). Consequently, it falls under fund law and requires FINMA approval. For investors, the main change thus lies in the legal wrapper in which they hold Bitcoin.
The crypto fund that FINMA approved in September 2021 carries the name "Crypto Market Index Fund". Its assets sit mainly in a basket of cryptocurrencies. Distribution remained limited to qualified investors. In addition, the fund could only invest in established crypto assets with sufficient trading volume. Its trades had to run solely through established counterparties based in a FATF member state. The new ETF goes further on two points. It holds a single underlying, Bitcoin, directly. Furthermore, as a retail fund, it is open to private investors for the first time. The conduct rules of the Financial Services Act (FinSA) thus govern their protection.
FINMA Guidance 01/2026 from January 2026 draws the same line. It treats collective assets and crypto ETPs separately. For the listing and collateralization of ETPs, it refers to the rulebooks of SIX Swiss Exchange and BX Swiss. For funds, in contrast, FINMA decides itself. Going forward, investors can choose between two legal forms. The real progress thus lies in the fund status.
FINMA relaxes risk diversification only for Bitcoin
Fund law generally requires risk diversification. A fund therefore spreads its assets across several investments and observes investment limits. The principle protects against concentration risk. If a single asset falls sharply, the hit does not reach the entire fund. A retail fund that holds only Bitcoin runs counter to this principle. For the new ETF, FINMA consequently approved an exemption from the applicable risk diversification rules. Only this exemption makes the Bitcoin ETF possible as a retail fund.
The regulator frames its reasoning narrowly. According to FINMA, Bitcoin has a long trading history and, compared with other cryptocurrencies, a particularly high trading volume. As a result, the argument does not readily carry over to other cryptocurrencies. Previously, the 2021 fund had spread its risk across a basket of established crypto assets. These, too, had to show sufficient trading volume. Now the exemption applies for the first time to a retail fund with a single asset. At the same time, the product remains in the special-risk category.
Custody and distribution face strict conditions
FINMA ties the approval to obligations for supervised institutions. They must take measures against operational risks and custody risks, as set out in Guidance 01/2026. The authority had published the document on the custody of crypto-based assets in January 2026. That was about nine months before the approval. For Bitcoin, custody mainly means securing the private keys that grant access to the coins. The risks include cyberattacks and careless safekeeping of these keys. Moreover, third-party custodians pose a counterparty risk if the crypto assets are not segregable in bankruptcy. Accordingly, institutions must select and monitor such custodians carefully.
In distribution, the FinSA conduct rules at the point of sale apply as well. Fund documents must also clearly highlight and explain the risks. For financial instruments based on cryptocurrencies, FINMA further requires institutions to comply strictly with these rules. These include clear warnings about volatility and the risk of loss. In addition, institutions must pay close attention to assessing appropriateness and suitability. In other words, an advisor must establish whether the product suits the individual client.
"The market risk associated with Bitcoin remains very high." - FINMA
Nevertheless, the conditions do not change the price swings of the underlying. The approval concerns the fund's structure and does not protect against market losses. Because of the high volatility, invested capital can lose substantial value. FINMA says this is why investors should weigh it carefully, especially when deciding how much to invest.
Several more providers await approval
Other fund providers have also filed or announced applications for Bitcoin ETFs with FINMA. A FINMA spokesperson told the news agency AWP of "several fund providers". However, the authority does not comment on ongoing proceedings. The applicants' names are not public either. For the fund already approved, the provider, fund name, fees and launch date are still open. With the first approval, FINMA did, however, disclose the criteria for the exemption.
The US market shows what demand an approved spot ETF can generate. Spot Bitcoin ETFs have traded there since January 2024. They currently manage combined net assets of around USD 106 billion. Cumulative net inflows totaled USD 57 billion. BlackRock's IBIT is by far the largest fund at USD 66.4 billion. Fidelity's FBTC follows with USD 14.7 billion, and Grayscale's GBTC with USD 10.4 billion. IBIT alone accounts for about 63% of total assets. Depending on the data provider, the totals differ by several billion. Until now, Switzerland lacked a retail fund with direct Bitcoin exposure, although ETPs offered access to the underlying. By comparison, the Swiss market for Bitcoin ETFs is only at the beginning.
