Australia set to welcome its first Bitcoin ETF

Posted: 20 April 2022 6:30 pm
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The offering will help provide Australian investors seamless, regulated access to the digital asset industry.

  • Cosmos Asset Management's Bitcoin ETF is set to go live on Cboe's trading network next week.
  • Experts believe the offering will help draw AUD$1 billion worth of inflow following its launch.
  • An additional 2 spot Bitcoin, Ether ETFs helmed by 21Shares and ETF Securities will also make their debuts over the coming few days.

The wait for Australia's first Bitcoin exchange traded fund (ETF) is finally over, with an AFR report stating that the Cboe will be listing one such offering as early as next week after regulators gave it the green light 2 days ago.

To this point, Cosmos Asset Management could see its Bitcoin (BTC) ETF make its market debut by 27 April. However, unlike most other offerings of its kind, the ETF is not designed to invest in BTC directly. Instead, the fund invests its capital into Purpose Investments' Bitcoin ETF, the first of its kind to have been launched in North America. Cosmos had entered into a long-term deal with Purpose Investments earlier this year for exactly this reason.

ASX Clear, Australia's leading equity capital markets clearing house, approved the Bitcoin ETF after it procured a total of 4 individual financial entities (4 institutional and 1 retail-sized) to "meet its tough margin requirements" and cover any settlement risks associated with the offering. Technically speaking, the clearing house put forth a mammoth 42% margin demand for the Bitcoin ETF to start trading under its umbrella.

Cosmos Asset Management is a subsidiary of Nasdaq-listed mining firm Mawson. It made its way into the Aussie cryptocurrency fund management sector via a product investing in BTC mining operations, including the popular Global Digital Miners Access ETF. The AFR also noted that after news of Cosmos' upcoming BTC ETF became public, numerous other asset management giants – including VanEck Australia, BetaShares and Monochrome Asset Management – started exploring similar moves.

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First BTC, ETH Spot ETFs also set to go live on Cboe

In addition to Cosmos' offering, 2 new Bitcoin- and Ethereum-based spot ETFs are also making their debut over the coming few days. The products will be helmed by Switzerland-based 21Shares, the world's largest issuer of crypto exchange traded products (ETPs) in conjunction with Australia-centric asset management firm ETF Securities.

Unlike Cosmos' offering that invests in shares of Purpose Investments' Bitcoin ETF, the ETFS 21Shares Bitcoin ETF (EBTC) and the ETFS 21Shares Ethereum ETF (EETH) are designed to track the value of Bitcoin and Ethereum in AUD. Each dollar is backed by assets of equal denomination held in a cold storage unit that Coinbase maintains.

Even though crypto ETFs have seen the light of day all through Europe and Canada, the release of such products here signals the dawn of a new era for the Australian finance sector whose regulatory entities have largely stayed away from digital currencies up until now, citing volatility reasons.

Interested in cryptocurrency? Learn more about the basics with our beginner's guide to Bitcoin, dive deeper by learning about Ethereum and see what blockchain can do with our simple guide to DeFi.


Disclosure: The author owns a range of cryptocurrencies at the time of writing.

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