Australia’s first Bitcoin ETF could attract $1 billion after launch next week

  • April 20, 2022

Australian investors will be able to trade its first Bitcoin spot ETF starting next week when the Cosmos Asset Management Bitcoin ETF launches on ASX Clear.

Financial regulators have greenlit Australia’s first Bitcoin ETF to begin trading on April 27 and the Australian Financial Review reports it could see up to $1 billion in inflows.

An ETF is a regulated exchange traded fund that allows investors to benefit from the price of Bitcoin (BTC) without needing to own any coins themselves directly.

Cosmos Asset Management beat out local contenders VanEck, BetaShares, and EFT Securities to issue Australia’s first Bitcoin ETF. Each firm has been in the running to close out regulatory approvals since at least March, according to the Sydney Morning Herald.

The Cosmos Asset Management Bitcoin ETF will be listed on CBOE Australia with approval from the Australia Securities Exchange (ASX) Clear capital markets clearinghouse. Approval was made after Cosmos landed the minimum four market participants to support the 42% margin requirements needed to cover risk according to an April 19 article by the AFR.

The Cosmos Bitcoin ETF offers indirect exposure to spot Bitcoin investing through the Canadian Purpose Bitcoin ETF.

Trader at Australian wealth management firm Zerocap, Kurt Grumelart, called the ETF approval “exciting” and commented that it “validates further institutional adoption” following the record breaking launch of the Betashares CRYP fund, which invests in crypto-exposed US Shares. On its launch in Nov 2021 the fund saw $10M of net inflows within the first ten minutes.

Grumelart expects the new Bitcoin ETF to be similarly successful

“The event marks a large step forward for Australia and mainstream acceptance of the crypto industry as a whole.”

Grumelart predicted that a successful launch will lead to an influx of other players. “If overseas markets are any indication, it is likely that a successful launch will lead to a host of listings for crypto asset based funds outside of Bitcoin,” he said

This will be the second crypto related ETF from Cosmos since last year when the firm issued its Global Digital Miners Access ETF.

Australian regulators have been working to hammer down clear-cut rules for the crypto industry over the past year. The Australian Securities and Investments Commission (ASIC) wants more authority over the industry, but Senator Andrew Bragg thinks that is inappropriate until cryptocurrency is recognized as a financial asset under Australian law.

Related: Aussie opposition under fire as election looms: ‘7 words is not a crypto policy’

Grumelart said he believes clarifying the rules will aid the development of the industry.

“As the new ASIC regulations come out governing crypto assets, we expect greater clarity for local custodians and service providers, opening up this as an avenue within the coming year.”

“As the new ASIC regulations come out governing crypto assets, we expect greater clarity for local custodians and service providers, opening up this as an avenue within the coming year.”