Spot Bitcoin ETFs have caused a major stir in the cryptocurrency industry, unlike anything seen before. Following the US and Hong Kong, Australia is now gearing up for a series of launches of Bitcoin exchange-traded funds.
The ASX has received applications from at least two organizations, and there’s another one in the pipeline
Australia Braces for Bitcoin ETF
ASX Ltd., which manages about 80% of the country’s equity trading, is expected to approve the first spot Bitcoin ETFs for the main board before the end of 2024, according to a recent report by Bloomberg.
These applications follow the success of US Bitcoin ETFs, which have gathered $53 billion this year. Despite outflows from Grayscale, BlackRock Inc. and Fidelity Investments’ offerings have topped the charts.
Funds directly investing in Bitcoin and Ether will also start trading in Hong Kong from April 30. Issuers are looking to take advantage of a significant crypto rebound that pushed BTC to an all-time high of nearly $74,000 last month.
Sydney-based BetaShares is actively working on launching a product on the ASX. The recent crypto inflows in the US signal a growing acceptance and longevity for the asset class, as per Justin Arzadon, head of digital assets at BetaShares. The company has even reserved ASX tickers for spot Bitcoin and spot Ether ETFs, indicating their confidence in the market.
Although ASX hasn’t confirmed a specific timeline, the entity is in discussions with various issuers interested in introducing crypto-based ETFs.
Demand for Spot ETFs
It is also important to note that Australia’s $2.3 trillion pension market could be a significant driver of these inflows, particularly with about a quarter of retirement assets in self-managed superannuation programs, where individuals have control over their investments.
VanEck, which offers similar ETFs in the US and Europe, resubmitted an application in February Jamie Hannah, deputy head of investments and capital markets for VanEck Australia, suggests these programs could become buyers of spot crypto funds. With a combination of self-managed super funds, brokers, financial advisers, and platform money, there’s considerable market potential for these ETFs to grow.
These recent applications mark the second wave of spot Bitcoin ETF launches in Australia, following initial listings two years ago on CBOE Australia. While some ETFs, like the one launched by Sydney-based Cosmos Asset Management in 2022, didn’t see significant inflows and were subsequently delisted, others, like the Global X 21Shares Bitcoin ETF, have managed to accumulate notable assets.
Monochrome Asset Management, led by former Binance Australia CEO Jeff Yew, has also applied to launch a spot Bitcoin ETF on CBOE Australia.
BetaShares prefers ASX for listing due to its scrutiny over the custody of tokens. Meanwhile, another player, DigitalX Ltd., mentioned in its half-year results in February that it had submitted an application. Its CEO Lisa Wade believes Australians could allocate up to 10% of their portfolios to cryptocurrencies, recognizing their potential as financial infrastructure.