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Australian financial regulators have finally greenlit the country’s first Bitcoin (BTC) exchange-traded fund (ETF), which is scheduled to start trading next week. Some estimate that the new product could lure in as much as $1 billion in investments.
Australian crypto investors will soon have access to the first Bitcoin ETF in the country. The Cosmos Asset Management Bitcoin ETF will start trading on CBOE Australia on April 27, 2022, after it secured approval from the Australia Securities Exchange (ASX) Clear capital markets clearinghouse, according to the Australian Financial Review.
The Australian Securities and Investments Commission already gave the green light to ETF providers to offer their products last year, according to the Sydney Morning Herald. However, providers must fulfill a number of conditions aimed at investor protection before could launch their ETFs.
These include the condition that providers must be willing to provide 42% margin requirements needed to cover the settlement risk for the highly volatile asset class. At the moment, there are four market participants who have agreed to this requirement. “We are now at our minimum number of clearing participants and that means we are good to go,” Hamish Treleaven, the chief risk officer at ASX, said.
Kurt Grumelart, a trader at the Australian wealth management firm Zerocap, expects the upcoming Cosmos Asset Management Bitcoin ETF to be successful after the record-breaking launch of Betashares CRYP fund in November 2021, which saw net inflows of $10 million within ten minutes. “The event marks a large step forward for Australia and mainstream acceptance of the crypto industry as a whole,” he said, according to Contelegraph.
A successful launch could mean the entry of more players in the niche. “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 added.
Clearer regulations could also help boost the industry’s development. “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,” he said.
Meanwhile, BetaShares’ chief executive Alex Vynokur expects his company to launch its own Bitcoin ETF later this year. “Crypto ETFs may provide just that extra layer of security many ETF investors are looking for,” he said.
