Switzerland's financial regulator has approved the country's first exchange-traded fund (ETF) that invests directly in Bitcoin and is available to retail investors, opening a new route for individuals to gain exposure to the cryptocurrency through a regulated investment vehicle.

The Swiss Financial Market Supervisory Authority (FINMA) said it granted the fund an exemption from standard risk-diversification requirements, citing Bitcoin's longer trading history and higher trading volumes compared with other cryptocurrencies. That exemption is what allows the fund to concentrate its holdings in Bitcoin rather than spread them across asset classes, as conventional diversified funds are required to do. The regulator did not identify the fund's issuer and did not specify a launch date. Other providers have submitted or announced applications for similar products.

Under the approval, institutions involved in the fund are required to mitigate operational and custody risks and to clearly disclose investment risks. The product falls under Switzerland's category of alternative investment funds that carry special risks — a classification that makes these disclosure and custody safeguards central to how the fund must operate for the general public.

The regulator cautioned that Bitcoin remains highly volatile and that investors could lose a substantial portion of their capital even when investing through an approved ETF.

The approval introduces a new retail investment fund structure in Switzerland, where Bitcoin exchange-traded products (ETPs) already trade under a different regulatory framework. FINMA previously approved a cryptocurrency fund for qualified investors in 2021, making the new vehicle the first fund-based Bitcoin product of its kind open to the broader retail market. Key details to watch: which issuer brings the fund to market, when it launches, and how FINMA rules on the competing applications already before it.