If Australia is successful in embracing the crypto asset class, it is extremely likely that it will witness an inflow of fresh money into its markets and wider economy.
The ProShares Bitcoin Strategy ETF (BITO) began trading on the New York Stock Exchange on Oct. 19, 2021. The exchange-traded fund (ETF) experienced an inflow of about $1 billion in natural volume on its first day, and within 24 hours, Bitcoin (BTC) reached a new all-time high for its price in US dollars. This comes a week after the Securities and Exchange Commission of the United States let the ETF’s application to lapse, thus giving the product the green light to proceed.
This is a big step forward for the United States, but it has also sent ripples through other global economies. If BITO continues to be as warmly welcomed as its first day suggests, it is probable that more and more countries will wish to join. The ETF invests in derivatives derived from Bitcoin futures contracts, not in Bitcoin. While purists may object, this offers significant protection for investors against Bitcoin’s intrinsic volatility. Other products with similar principles in other markets might help alleviate the fears that have kept institutional investors at away for years.
A success storey in a country like the United States undoubtedly casts a good light on the likelihood of such funds globally, and providing Bitcoin exposure to Australian institutions promises to benefit both Bitcoin and the Australian economy. More significantly, this has created a chance for Australia to lead financial innovation by fully embracing cryptocurrencies.
And the majority of Australia’s parliamentarians concur. A recent study by the Australian Parliament’s Select Committee on Australia as a Technology and Financial Centre recommended the framework that would level the playing field between Australia and the United States, the United Kingdom, and Singapore.
The domino effect of exchange-traded funds
With that structure in place and in light of BITO’s performance, Australian fund manager BetaShares has launched the Crypto Innovators ETF on the Australian Securities Exchange (ASX) under the ticker CRYP. Exposure to the fund enables investors to monitor a diverse portfolio of cryptocurrency-related firms through the Bitwise Crypto Industry Innovators 30 Index. The index’s core portfolio includes famous cryptocurrency companies such as Coinbase, Riot Blockchain, and Michael Saylor’s business intelligence software firm MicroStrategy.
Within 15 minutes of its inception, the fund shattered ASX records, amassing about $31.3 million by the end of the first day.
Essentially, by investing in business shares rather than specific crypto assets such as Bitcoin and Ether (ETH), BetaShares’ ETF enables interested consumers to participate in the burgeoning digital asset market without physically purchasing any crypto. Indeed, BetaShares boasts that 85 percent of its index is composed of companies that generate at least 75 percent of their income directly from the crypto market or that have at least 75 percent of their assets in direct crypto holdings. This strategy maximises long-term gains as Bitcoin matures while simultaneously mitigating the shock of a market correction, which many feel is nearly certain.
Also Read: Robert Kiyosaki Of Rich Dad Poor Dad Says He’s Buying Bitcoin And Ether As Inflation Rises
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