Australia is gearing up to introduce a series of spot Bitcoin exchange-traded funds (ETFs) on its primary stock exchange before the close of 2024, echoing similar moves witnessed in the United States and Hong Kong. Major players in the financial sector, including Van Eck Associates Corp. and BetaShares Holdings Pty, are actively gearing up for these rollouts, with the Australian Securities Exchange (ASX) expected to grant approvals imminently.
Insider sources, preferring anonymity, suggest that ASX Ltd., responsible for approximately 80% of the nation’s equity trading, is poised to authorize the first spot Bitcoin ETFs before 2025. This development aligns with the global surge in interest in cryptocurrency ETFs, fueled by significant investments in similar funds in the United States, where industry giants like BlackRock and Fidelity Investments dominate.
Justin Arzadon, head of digital assets at BetaShares, emphasized, “The inflows into the US digital assets market prove that digital assets are here to stay.” He also indicated that his firm has secured ASX tickers for spot-Bitcoin and spot-Ether ETFs, signaling robust preparations for imminent listings.
An ASX spokesperson acknowledged the exchange’s engagement with multiple issuers eager to introduce Bitcoin-based ETFs, although the precise timeline for these approvals remains undisclosed.
Bitcoin’s Potential Impact on Australia’s Pension Market
The advent of spot-Bitcoin ETFs could potentially revolutionize Australia’s $2.3 trillion pension market. Roughly a quarter of the country’s retirement assets are managed through self-managed superannuation programs, allowing individuals to select their investments. These programs are seen as potential significant purchasers 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,” remarked Jamie Hannah, deputy head of investments and capital markets at VanEck Australia.
However, Australia’s journey towards embracing spot-Bitcoin ETFs has encountered hurdles. Earlier endeavors to launch similar products on the smaller CBOE Australia platform faced limited success. The ETF by Cosmos Asset Management was delisted due to low inflows, while the Global X 21Shares Bitcoin ETF, also launched on CBOE Australia, has amassed only about $62 million in assets to date.
Despite these setbacks, the transition to the more prominent ASX platform is anticipated to provide these ETFs with increased visibility and potentially higher inflows, given ASX’s larger trading volume and broader investor base.
The push for spot Bitcoin ETFs in Australia coincides with global markets increasingly embracing digital assets. Regulatory bodies worldwide are gradually crafting frameworks allowing cryptocurrencies to be integrated into mainstream financial products, reflecting a notable shift in their perceived stability and suitability as investment vehicles.
BetaShares and other firms are actively preparing for regulatory approval, with a focus on addressing critical concerns such as secure token custody. “ASX is the exchange we want to list on,” affirmed Arzadon, underscoring the strategic significance of ASX’s robust regulatory environment and established market presence.
Lisa Wade, CEO of DigitalX, suggested that Australians might allocate up to 10% of their investment portfolios to cryptocurrencies, indicating strong confidence 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 remarked.
