Bitcoin ETF finally set to arrive in Australia
It has taken a long time but the first exchange traded fund (ETF) to directly hold Bitcoin will start trading on the Australian Securities Exchange on Thursday.
While there have been some bitcoin linked ETFs for some time and also some ETFs listed on the smaller CBOE exchange, the VanEck Bitcoin ETF (ASX: VBTC) is the first spot price product to list on the main board.
It will be interesting to see what sort of turnover the Bitcoin ETF achieves over time, given that US Bitcoin ETF listings that have been operating for about six months have now attracted around $87 billion with a range of nine offerings from BlackRock, Fidelity Investments and VanEck.
Controversial but plenty of investor curiosity
VanEck’s Asia Pacific managing director, Arian Neiron, admitted that investing in cryptocurrencies is a controversial topic but said that bitcoin remained an “emerging asset class that many advisers and investors want to access”.
“We have developed a robust offering that we believe provides an opportunity for bitcoin exposure using a regulated, transparent and familiar investment vehicle,” said Mr Neiron.
Interest in listing Bitcoin ETFs fell away during the so-called crypto winter but has returned with a vengeance since the prices of many major cryptocurrencies rebounded strongly.
ETF listings lead to increasing demand and prices
In the US, the listing of Bitcoin ETFs brought in a wave of new investors who were otherwise wary of collapse prone online crypto exchanges, with some institutional interest as well as many individual investors.
The price of Bitcoin also rose dramatically after the US listings before stabilising around the US$66,000 mark in recent months.
VanEck claim their research shows that 76.2% of surveyed financial advisers have fielded queries from customers asking about bitcoin investments, with some of those advisers saying they would add some exposure to a bitcoin ETF to client portfolios if it was listed on the ASX.
More crypto listings on the way
The next step could be for an Australian ETF based on the second most commonly traded cryptocurrency, Ethereum.
Ethereum prices have been rising on speculation that an ETF could soon be listed on the US exchange and the ASX framework developed for bitcoin would also allow for an Ethereum listing if one was developed by an ETF originator.
The new VanEck ETF is unlikely to have the field to itself either, with other ETF originators including BetaShares and DigitalX (ASX: DCC) also working on local bitcoin ETF listings.