Bitcoin ETFs growing on Australian markets
After the US Securities and Exchange Commission approved a raft of spot bitcoin exchange traded fund (ETF) and gave the greenlight to key regulatory filings for several spot Ether ETF, the trend has finally made its way to down under. This week, the Australian Securities Exchange (ASX) approved its first-ever Bitcoin ETF, following a successful Bitcoin ETF listing at rival exchange Cboe Australia earlier this month.
The VanEck Bitcoin ETF will list on the ASX under the ticker VBTC this week, making it the first ETF on the exchange that tracks the price of Bitcoin. VanEck’ Asia Pacific managing director, Arian Neiron, expressed his confidence in the fund, saying that Bitcoin is an
emerging asset class that many advisers and investors want.
Neiron also mentioned the benefits of investing in Bitcoin via a regulated vehicle such as VBTC,
We have developed a robust offering that we believe provides an opportunity for bitcoin exposure using a regulated, transparent and familiar investment vehicle.
VanEck’s website also posted a blog that says
we consider the ETF vehicle is the optimal delivery mechanism for an asset class like bitcoin.
It is reported that VBTC will primarily act as a ‘feeder fund’ that employs a passive management strategy, and provide Australian investors exposure to Bitcoin by investing in its US sister ETF – the VanEck Bitcoin Trust (ticker HODL).
Earlier this month, Australia-based Monochrome Asset Management won approval from Cboe Australia to list its Monochrome Bitcoin ETF (ticker IBTC). Unlike VBTC, Monochrome’s IBTC is the first and only ETF that holds Bitcoin directly in Australia. Monochrome now joins Global X’s 21Shares Bitcoin ETF, which has operated on Cboe since 2022 and was the best-performing listed ETF in Australia in the 12 months to March 31, with a whopping 153.4% return.
Michael Bacina, Partner of this firm and Chair of Blockchain Australia (recently rebranded as ‘DECA‘ during the annual Blockchain Week) commented:
A Bitcoin ETF being available on major Australian stock exchanges is a great movement forward for the crypto-space…
He also added that:
It’s important to note the key differences between the products, as only one of the ETFs has direct Bitcoin holdings and can offer holders a redemption in Bitcoin.
The approval of Bitcoin ETFs in Australia has taken years to materialise. They arrive almost six months after the SEC approved 9 Bitcoin ETFs in the US. The US listing has reportedly helped draw in a new wave of institutional investors, including several global hedge fund giants. Many Tradfi and banking giants have also jumped on the Bitcoin ETF band wagon. It is reported that iShare’s Bitcoin Trust, the most popular US Bitcoin ETF, holds about USD$19.5 billion in digital assets.
Given Australia’s robust regulatory and exchange framework, it is no small feat to secure approvals from the regulators and exchanges to list any ETF, including one referencin a novel and emerging asset class. With the popularity of US issued Bitcoin and Ether ETF exceeding expectations, we expect to see more of them coming to the market in Australia in the coming years.
Michael Bacina – Partner, Piper Alderman
Steven Pettigrove – Partner, Piper Alderman
Jake Huang – Associate, Piper Alderman