Australia is poised to welcome a series of spot Bitcoin exchange-traded funds (ETFs) on its main stock exchange by the end of 2024, mirroring initiatives previously seen in the United States and Hong Kong. Key players in the financial industry, including Van Eck Associates Corp. and BetaShares Holdings Pty, are actively preparing for these launches, with the Australian Securities Exchange (ASX) expected to grant approvals soon.
According to sources who wished to remain anonymous, ASX Ltd., which facilitates approximately 80% of the country’s equity trading, is anticipated to give the green light to the first spot Bitcoin ETFs before 2025. This development comes as the global interest in cryptocurrency ETFs grows, spurred by significant accumulations in similar funds in the United States, where players like BlackRock and Fidelity Investments dominate.
“The inflows into the US digital assets market prove that digital assets are here to stay,” stated Justin Arzadon, head of digital assets for BetaShares. He also mentioned that the firm has reserved ASX tickers for spot-Bitcoin and spot-Ether ETFs, signaling strong preparations for imminent listings.
An ASX spokesperson confirmed the exchange’s engagement with several issuers eager to launch Bitcoin based ETFs, though a precise timeline for these approvals remains undisclosed.
Bitcoin’s Potential Impact On Australia’s Pension Market
The introduction of spot-Bitcoin ETFs could have a transformative effect on Australia’s $2.3 trillion pension market. Approximately 25% of the country’s retirement assets are managed through self-managed superannuation programs that permit individuals to choose their investments. These programs are viewed as potential key buyers of the new spot-crypto funds.
“Self-managed super funds, brokers, financial advisers, and platform money create a large enough addressable market to support substantial ETF growth,” noted Jamie Hannah, deputy head of investments and capital markets at VanEck Australia.
However, Australia’s journey towards embracing spot-Bitcoin ETFs has been fraught with challenges. Earlier attempts to launch similar products on the smaller CBOE Australia platform yielded limited success. Cosmos Asset Management’s ETF was delisted due to low inflows, and the Global X 21Shares Bitcoin ETF, also launched on CBOE Australia, has only accumulated about $62 million in assets to date.
Despite these setbacks, the move to the more prominent ASX platform is expected to provide these ETFs with greater visibility and potentially higher inflow, due to the ASX’s more substantial trading volume and broader investor base.
The push for spot Bitcoin ETFs in Australia comes at a time when global markets are increasingly open to digital assets. Regulatory bodies worldwide are gradually shaping the frameworks that allow for cryptocurrencies to be included in mainstream financial products, reflecting a significant shift in their perceived stability and viability as investment options.
BetaShares and other firms are actively preparing for regulatory approval, with an emphasis on addressing critical issues such as the secure custody of tokens. “ASX is the exchange we want to list on,” said Arzadon, signaling the strategic importance of ASX’s robust regulatory environment and established market presence.
Lisa Wade, CEO of DigitalX, suggested that Australians could allocate up to 10% of their investment portfolios to cryptocurrencies, indicating a strong belief in their long-term potential as alternative financial instruments. “Cryptocurrencies have the potential to act as financial rails that could redefine the future of money,” Wade commented.
At press time, BTC traded at $62,508.
Featured image created with DALL·E, chart from TradingView.com
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