Aussie ETF providers welcome SEC decision in US to approve spot bitcoin ETFs
\nBetaShares says the SEC decision is \u201ca watershed day for the maturity of bitcoin\u201d
\nVanEck says ETFs offer investors Bitcoin exposure without need for self-custody<\/p>\n
Aussie ETF providers have reacted in overwhelmingly positive fashion to news regulators in the US have approved the launch of spot Bitcoin ETFs, enabling investors to easily access the 15-year-old cryptocurrency through traditional securities exchanges.<\/p>\n
BetaShares\u2019 head of digital assets Justin Arzadon says while regulators in many countries have approved spot Bitcoin ETFs, including Australia, none are bigger than the US.<\/p>\n
\u201cThe US Securities and Exchange Commission\u2019s (SEC) decision to approve spot bitcoin ETFs from a range of fund managers is a watershed day for the maturity of Bitcoin,\u201d he says.<\/p>\n
Arzadon says the much anticipated move to approve a spot Bitcoin ETF will finally provide US-based investors with an option to invest in the cryptocurrency via a familiar ETF structure.<\/p>\n
\u201cThe SEC\u2019s approval of spot bitcoin ETFs should add further confidence to the digital asset ecosystem and could pave the way for Wall Street to move deeper into cryptocurrencies as an asset class,\u201d he says.<\/p>\n
\u201cThe anticipated flows into US-traded spot bitcoin ETFs in the initial days after launch are expected to be significant and would serve as an endorsement of the global investor preference for ETFs over other investing structures.<\/p>\n
\u201cSpecifically for Bitcoin, it removes the need to directly navigate issues related to storage and safekeeping, as well as providing buying options beyond unregulated exchanges.\u201d<\/p>\n
Furthermore,\u00a0 Arzadon says while traditional finance has talked a big game about moves into digital assets, the reality has been more mixed in the wake of continued volatility for the sector.<\/p>\n
\u201cThe decision by the SEC is expected to provide further confidence and legitimacy to the digital assets ecosystem as it matures as an asset class,\u201d he says.<\/p>\n
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Global X, the provider of Australia\u2019s only two spot cryptocurrency ETFs,\u00a0 has also welcomed news of the SEC approval in the US.<\/p>\n
Global X\u2019s 21Shares Bitcoin ETF (CBOE:EBTC)<\/a> and 21Shares Ethereum ETF (CBOE:EETH)<\/a> track performance of the price of Bitcoin and Ethereum respectively in Aussie dollars.<\/p>\n The ETF\u2019s provide holders access to physical cryptocurrencies held in cold storage by Coinbase, the world\u2019s largest custodian of cryptocurrencies.<\/p>\n CEO of Global X ETFs in Australia Evan Metcalf says ETFs provide investors with a regulated and accessible way to gain exposure to cryptocurrency price movements without the complexities associated with direct ownership.<\/p>\n He says the SEC\u2019s approval affirms the maturation of the cryptocurrency space, strengthening its position as a legitimate and promising avenue for investors.<\/p>\n \u201cThis decision aligns with our vision of broader global acceptance of digital assets and addresses the escalating demand for investment opportunities in the cryptocurrency sector,\u201d Metcalf says.<\/p>\n \u201cIt is encouraging to witness a growing recognition of digital assets as a legitimate investment class, and we anticipate heightened demand for this type of exposure from investors, particularly here in Australia.<\/p>\n \u201cThe notable rallies of Bitcoin and Ethereum this year further underscores this growth potential.\u201d<\/p>\n \u00a0<\/p>\n VanEck Asia-Pacific CEO and managing director Arian Neiron told Stockhead<\/em> the asset manager has long advocated for the ETF wrapper as an effective and convenient solution for investors seeking Bitcoin exposure without the need for self-custody.<\/p>\n He says VanEck was the first established ETF issuer to file for a futures-based Bitcoin ETF in 2017 and followed that up with a filing for a spot Bitcoin ETF in 2018.<\/p>\n \u201cDespite regulatory headwinds in the US, the firm\u2019s digital assets efforts continued with product development and investment globally,\u201d he says.<\/p>\n \u201cThe firm\u2019s European arm currently manages 12 crypto ETPs, and its MarketVector index subsidiary was the first to launch a definitive suite of digital asset indexes with its flagship Bitcoin and Ethereum benchmark rates.\u201d<\/p>\n He says the SEC approval transforms crypto into a regulated asset class in the US and is undeniably a significant step in the maturity and mainstream acceptance of Bitcoin and digital assets broadly.<\/p>\n \u201cIt enables the wealth management community and individuals to access Bitcoin via a regulated and insured investment vehicle, opening up the asset class to institutional investors including hedge funds, sovereign wealth funds, pension funds, 401Ks and registered investment advisors,\u201d he says.<\/p>\n Furthermore, he says VanEck has a long-standing and deep heritage in investing in gold and so store-of-value investing is in its DNA.<\/p>\n \u201cWe see Bitcoin as a form of digital gold,\u201d he says.<\/p>\n \u201cIt is a finite asset and a lot of new generation investors see it as a hedge against inflation and quantitative, while offering providing important portfolio diversification as Bitcoin is an uncorrelated asset.\u201d<\/p>\n \u00a0<\/p>\n Neiron says VanEck was also the first ETF provider in Australia to announce it was working with ASIC and the ASX on bringing a spot Bitcoin ETF to the ASX, as well as an Ethereum ETF.<\/p>\n \u201cThis was back in early 2021 when we formally lodged our submission,\u201d he says.<\/p>\n Neiron says the company continues to be in talks with the ASX.<\/p>\n \u201cHowever, it is critical to ensure Australian investors have the same high-quality investing experience with Bitcoin ETFs on ASX as they have with other ETFs in Australia,\u201d he says.<\/p>\n \u201cThat is, tradability, price discovery and, importantly, investor protection.\u201d<\/p>\n Neiron says the custody of crypto assets is paramount to ensure investors\u2019 assets are protected and compliant with Australian custodial obligations.<\/p>\n \u201cAt this stage, the clearing requirements are quite onerous for market participants such as brokers, which makes the economics challenging,\u201d he says.<\/p>\n \u201cFurthermore, there are next to no digital asset custodians in Australian that abide by the custodian requirements, which again contribute to the difficulty surrounding launching in this market.\u201d<\/p>\n An ASX spokesman told Stockhead<\/em> in August 2022 the bourse amended the AQUA rules (the rules that deal with the admission of ETFs on ASX) to establish a new category of permissible underlying assets for ETFs, which includes crypto assets Bitcoin and Ethereum.<\/p>\n \u201cThe ASX continues to engage with a number of issuers that are interested in admitting crypto-asset based ETFs,\u201d he says.<\/p>\n BetaShares says it is working to bring to the ASX Bitcoin and Ethereum to the market under the tickers 1BTC and 1ETH.<\/p>\n \u00a0<\/p>\n Arzadon says the move to approve a spot Bitcoin ETF in the US may provide a long-term tailwind to the companies which service the crypto ecosystem.<\/p>\n \u201cThe so-called \u2018picks and shovels\u2019 of the crypto economy will perhaps see higher demand for many of their services as traditional finance moves deeper into the sector,\u201d he says.<\/p>\n BetaShares Crypto Innovators ETF (ASX:CRYP)<\/strong><\/a> \u2013 which focuses on digital currency and blockchain-associated companies or the \u00a0\u2018picks and shovels\u2019 \u2013 was a star performer of the Australian ETF industry in 2023.<\/p>\n CRYP, which broke an ETF record when it listed on the ASX on November 4 2021, by attracting more than $8 million within 45 minutes, rose more than 200%.\u00a0<\/a> CRYP currently has more than $120 million in assets under management (AUM).<\/p>\n \u00a0<\/p>\n Arzadon says while the SEC decision is positive for one for the digital assets ecosystem, investors should not get ahead of themselves when it comes to allocations to the asset class.<\/p>\n \u201cDigital assets remain highly volatile and as a result should only form a very small part of an overall portfolio,\u201d he says.<\/p>\n \u201cInvestors should generally look to build a diversified portfolio core around Australian and international equities as well as bonds.<\/p>\n \u201cDepending on their circumstances, investors might then consider including a small allocation to digital assets within the alternatives component of their portfolio.\u201d<\/p>\n Stockhead\u2019s <\/em>resident crypto go-to-guy Rob Badman has more coverage on the SEC decision:<\/p>\n \u2018Bitcoin is unstoppable\u2019, \u2018the floodgates are open\u2019 \u2013 bullish sentiment abides post ETF approvals<\/strong><\/a><\/p>\n ETF riders, raging bulls: Six wild Bitcoin predictions now it\u2019s a done deal<\/strong><\/a><\/p>\n <\/span><\/p>\n The post \u2018Watershed day\u2019 \u2013 Aussie ETF providers react to US SEC approval of Bitcoin ETFs<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"VanEck has long advocated crypto ETFs<\/h2>\n
Moves to bring more crypto spot ETFs to ASX<\/h2>\n
Boost for companies servicing crypto space<\/h2>\n
Still, a word of caution<\/h2>\n