After many months of industry consultation, in November of 2021, the Australian Securities and Investments Commission (ASIC), approved long awaited Bitcoin and Ethereum exchange-traded funds (ETFs).
In doing so, ASIC has provided the best-practice requirements and guidelines for those issuing Bitcoin or Ethereum ETFs, emphasising the protection and storage of digital assets.
“We recognise the interest in, and demand for, exchange-traded products (ETPs) and other investment products that hold crypto-assets in Australia. However, we are also aware of the real risk of harm to consumers and markets if these products are not developed and operated properly.” ASIC wrote in a statement in November.
This became a reality in the last few days, Australian asset management firm ETF Securities and Switzerland-based ETF issuer 21shares announced that they will launch two ETFs on April 27.
It will be listed on Cboe equities trading platform next week.
The Australian Securities Exchange (ASX) confirmed that it would have four market participants that will cover initial margin requirements of 42%, with a notice sent to market participants today according to the ASX’s Chief Risk Officer, Hamish Treleaven.
ETFS 21Shares Bitcoin ETF (Code: EBTC) will track the price of Bitcoin in Australian dollars. It is fully backed by Bitcoin held in cold storage by Coinbase. ETFS 21Shares Ethereum ETF (Code: EETH) will track the Australian dollar price of Ether, which is the cryptocurrency of the Ethereum blockchain. It is fully backed by ether held in cold storage by Coinbase.
Graham Tuckwell, Executive Chairman of ETF Securities Australia says EBTC and EETH will provide investors a new avenue of trading digital assets in a tightly regulated environment, without the need to establish and maintain their own bitcoin or Ethereum wallets, or manage the risks.
“Once we decided to build a range of crypto ETFs for the Australian market, there was only one partner we wanted to work with, and that’s 21Shares. Its pioneering approach to secure investment in cryptocurrency has been emulated by other fund managers around the world,” Tuckwell stated.
Hany Rashwan, CEO and Co-Founder of 21Shares, said: “We’re so incredibly excited to be able to offer the first direct exposure to the Bitcoin and Ethereum ETF in Australia. Australian investors clearly want and deserve an affordable, easy, and professional way to access the growing crypto asset class and we’re delighted to continue building accessible bridges into the crypto world. We’re starting with Bitcoin and Ethereum but have even more exciting plans for Australian investors”.
ETF Securities Head of Distribution Kanish Chugh says Bitcoin has been the best performing asset over the past 10 years and Ethereum has been one of the top performing assets over the past five years. “They may be used as alpha tilts or side bets in a portfolio. They can also be bought as portfolio diversifiers, as they are completely different assets and uncorrelated to shares, bonds and commodities.”
Chugh also stated that those Australian investors looking for exposure to cryptocurrencies, investment via EBTC and EETH overcomes the pitfalls of the cryptocurrency market, including low exchange quality, weak custody arrangements, vulnerability to hacking and the loss of private keys and passwords.
Exciting times in the Australian cryptocurrency market whilst U.S. investors are still waiting for the SEC to approve a Bitcoin ETF, which hopefully occurs soon!
