Australia’s First Crypto ETF Launched Tech Tribune France

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The five-year race to launch the first spot cryptocurrency exchange-traded funds in the Asia-Pacific region ended in a stalemate on Thursday.

Sydney-based ETF Securities’ bitcoin and ether spot ETFs, built in collaboration with Swiss-based 21Shares, began trading this morning on Australian exchange Cboe. Sydneysiders Cosmos Asset Management bitcoin feeder ETF also launched today on the same exchange.

The listings mark the latest step in the globalization of exchange-traded products investing in “physical” cryptocurrency, which have until now only been available in Canada, Brazil and a swath of European countries. So far, US regulators have only allowed crypto futures-based ETFs, while the UK hasn’t even.

The Australian launches represent the culmination of a five-year battle, with ETF Securities first approaching regulators with the idea of ​​launching a crypto ETF in 2017.

The long gestation period is coming to an end just as digital currencies have fallen out of favor, however, with bitcoin’s price falling below $30,000 for the first time since July this week, cementing a 50% decline. from the November highs.

Nonetheless, Kanish Chugh, Head of Distribution at ETF Securities, said: “Australian investor interest in cryptocurrencies has not waned in recent months, although we have seen some underperformance. And with bitcoin’s recent selloff as well, this could present an opportunity for investors looking for attractive entry points into this new asset class.”

ETFS and Cosmos hope to gain “first mover advantage” in the market, New York-based VanEck is expected to launch a competing product on the ASX, Australia’s main stock exchange, in the coming weeks, and Canadian company 3iQ Digital Asset Management to launch another ETF on the Cboe Australia exchange.

Both ETFS and Cosmos had planned to launch their funds two weeks ago, but a last-minute problem arose with what 21Shares chief executive Hany Rashwan called a “downstream infrastructure provider,” considered such as a prime broker or clearer. This is now believed to have been resolved.

The products take different approaches. The Cosmos Purpose Bitcoin Access ETF (CBTC) is a feeder fund that will buy units of the $1.1 billion Purpose Bitcoin ETF (BTCC), which listed in Toronto in February 2020. The overall fee will be 1.25 %.

In contrast, the 21Shares Bitcoin ETF (EBTC) ETFS and the 21Shares Ethereum ETF (EETH) ETFS will invest directly in the underlying securities. They were built in partnership with 21Shares – the world’s largest crypto ETP manager with over 30 products and $2.5 billion in assets under management – ​​which will provide research and operational support. The fee for both is 1.25%.

ETF Securities said the funds are a “major step in mainstreaming cryptocurrency ownership,” allowing investors to trade and own crypto in a “tightly regulated environment under government oversight.”

“Until now, Australians wanting to buy bitcoin or ether have been forced into unregulated crypto exchanges, which come with weaker investor protections,” he added.

For his part, Rashwan saw the listing as an “early point of entry into the whole APAC region”, given Australia’s role as an Asia-Pacific investment hub.

Rashwan, who launched the world’s first crypto ETP in Zurich in 2019, added that 21Shares was “looking at several dozen countries around the world” with the aim of launching more such vehicles. “We are expanding beyond Europe,” he said.

Established North American crypto managers are also keen to gain a foothold in the Australian – and wider Asian – market even though they have been beaten at the right time.

Planned offerings from 3iQ, which claims to be Canada’s largest digital asset manager at $2 billion, will also be feeder funds.

The 3iQ CoinShares Bitcoin Feeder ETF and 3iQ CoinShares Ether Feeder ETF, which are also to be listed on Cboe Australia, will buy shares of two existing ETFs listed on the Toronto Stock Exchange.

VanEck also has experience in the space, managing a bitcoin futures ETF and a private spot bitcoin fund in the US, and over a dozen notes traded on spot crypto exchange in Europe, as well. than a wide range of other offers.

Its proposed Australian ETF will invest directly in bitcoin and will be listed on the ASX, which last week officially added digital assets to the list of eligible underlying assets for exchange-traded funds.

Arian Neiron, general manager of VanEck Asia Pacific, was not concerned about rivals entering the market first.

“For something as commoditized as bitcoin, it will depend on the quality of the product and the price. ASX was our choice of exchange and we are confident that it is the way to go,” he said.

Because Australians invest primarily through pension schemes, Neiron said “they have a conservative disposition. They want a strong brand and a strong balance sheet that is global and [a fund] which is on the main board of the ASX.

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