So the first trifecta of the Aussie crypto-ETFs (exchange-traded funds) hit the Cboe Australia exchange on Thursday.
The world did not end.
But for a baguette many years in the baking the welcome was as subdued as the price action.
Back-peddling on a moment rich in history, if not capital, saw the first twitches of the Cosmos Asset Management BTC feeder ETF (Cosmos Purpose Bitcoin Access ETF (CBTC)) and the (EETH) Ether ETF of Kanish Chugh’s ETF Securities as well as their spot Bitcoin (EBTC) ETF – the latter two created in tandem with the Swiss outfit, 21Shares.
This was how they fared on debut:
- The Cosmos Purpose Bitcoin Access ETF (CBTC), garnered inflows of just above $454k, by the end of trade on Friday that had grown by 15%
- The ETFS 21Shares Bitcoin ETF (EBTC) and ETFS 21Shares Ether ETF (EETH), garnered inflows of $955k and $604k, respectively.
Launching into a stablecoin sh*tstorm
The three additions are landmark moments for Australia’s participation in the attempt to mainstream the globalisation of ETFs – turning the cryptic parts of crypto into something more like a real asset. It was a long and colourful trail to blaze – ETF Securities began nudging regulators over the idea of launching a crypto ETF almost five years ago.
Opening into a stablecoin sh*tstorm, all three ETFs inspired lacklustre trade as the broader crypto market gave away more than $200 billion in value. All the funds attracted less than $1 million in volumes. When BetaShares launched its Crypto Innovators ETF (ASX:CRYP) on November 4, 2021 it hit the record $39.7 million of trading value for the day.
But BTC has lost more than 50 per cent of its value over the last six months amid a broader market retreat which has taken a near $1.5 trillion pound of flesh from all corners of the crypto market.
That didn’t bother ETF Securities’ Kanish Chugh none. He says the crypto collapse that confronted traders in Sydney on Thursday morning may actually have been a blessing in disguise.
“Australian investor interest in cryptocurrencies has not waned in recent months even as we have seen underperformance.
“And with Bitcoin’s recent sell-off as well, it may present an opportunity for investors who have been looking for attractive entry points into this new asset class,” Chugh said.
Cryptocurrency ‘in a regulated manner’
Cboe Australia CEO, Vic Jokovic, said there was general delight in the partnership with ETF Securities, “to bring the first Crypto ETFs to market in Australia on the exchange.”
“EBTC and EETH are breakthrough products that will pave the way for more Australians to expose their portfolios to cryptocurrency in a regulated manner.”
With its mother ship circling – Cboe Global Markets – Cboe Australia will be looking to leverage off the parent company’s global reach and its tech.
ETF Securities chairman Graham Tuckwell said by offering access through an ETF, Aussie investors can now gain portfolio exposure to these crypto-currencies in an institutional-type way.
“The market capitalisation and trading volumes for these two leading cryptocurrencies are now larger than any company listed on the Australian stock exchanges, yet investors have not been able to gain access to them in a regulated manner,” Tuckwell added.
Crypto on the ASX
VanEck expected to launch a rival product on the ASX, Australia’s primary exchange, in the coming weeks, and Canada’s 3iQ Digital Asset Management to debut another ETF on the Cboe local exchange.
Anxious American regulators look pretty damn far from this kind of thing, and have only gone for allowing some futures-based crypto ETFs. While the Europeans and Canada set the precedent for Australia to follow, other markets like the UK haven’t even toyed with the idea of crypto-futures.
BetaShares also has plans to launch two ETFs which will provide exposure to the spot price of Bitcoin and Ethereum under the tickers 1BTC and 1ETH respectively.
The ASX last week amended its operating rules to allow for crypto exchange traded products. BetaShares CEO Alex Vynokur told Stockhead the company welcomes the ASX’s recent announcement about the rules for cryptocurrency exchange traded products. These amendments to the operating rules represent another milestone on the journey to offer ETFs that provide exposure to the spot prices of Bitcoin and Ethereum
“BetaShares is continuing to work closely with relevant regulators and market infrastructure partners to deliver cost effective, true to label and robust ETFs that offer exposure to the spot price of Bitcoin and Ethereum to market under the tickers 1BTC and 1ETH respectively.”
By the close on Friday EBTC was up 13% and EETH 17%. CBTC had improved circa 15%.