Australia’s first Bitcoin ETF might attract $1 billion after its introduction
Australian investors will have access to the country’s first Bitcoin spot ETF next week when the Cosmos Asset Management Bitcoin ETF is listed on ASX Clear.
Financial authorities have approved Australia’s first Bitcoin ETF, which will begin trading on April 27 and is expected to attract up to $1 billion in inflows, according to the Australian Financial Review.
An ETF is a regulated exchange-traded fund that enables investors to profit from the rise in the price of Bitcoin (BTC) without actually owning any coins.
Cosmos Asset Management defeated local rivals VanEck, BetaShares, and EFT Securities to launch Australia’s first Bitcoin exchange-traded fund (ETF). According to the Sydney Morning Herald, each business has been in the race to finish off regulatory clearances since at least March.
With clearance by the Australia Securities Exchange (ASX) Clear capital markets clearinghouse, the Cosmos Asset Management Bitcoin ETF will be launched on CBOE Australia. Cosmos received approval after securing a minimum of four market players to back the 42 percent margin requirements necessary to cover risk, according to an April 19 AFR report.
Through the Canadian Purpose Bitcoin ETF, the Cosmos Bitcoin ETF provides indirect exposure to spot Bitcoin investment.
Kurt Grumelart, a trader at Australian asset management company Zerocap, described the ETF certification as “exciting” and said it “validates greater institutional adoption” after the record-breaking debut of the Betashares CRYP fund, which invests in crypto-exposed US stocks. The fund received $10 million in net inflows within the first ten minutes of its opening in November 2021.
Grumelart anticipates a similar performance for the new Bitcoin ETF. “The event represents a significant step forward for Australia and the crypto sector as a whole.”
Grumelart projected that if the launch is successful, it would result in an inflow of new gamers. “If outside markets are any indicator, a successful debut would almost certainly result in the listing of a slew of crypto asset-based funds other than Bitcoin,” he added.
This will be Cosmos’ second crypto-related ETF as the business launched its Global Digital Miners Access ETF last year.
Over the last year, Australian officials have been working out clear guidelines for the cryptocurrency business. The Australian Securities and Investments Commission (ASIC) wants to increase its regulatory power over the business, but Senator Andrew Bragg believes it is premature until cryptocurrency is recognized as a financial instrument under Australian law.
Grumelart said that he feels that clarifying the regulations would promote the industry’s growth. “As new ASIC legislation regulating crypto-assets becomes available, we anticipate increased clarity for local custodians and service providers, potentially opening up this channel in the future year.”