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Investment managers jostle to deliver first ASX-listed bitcoin ETF

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By Rhea Nath
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4 minute read

VanEck believes it is “uniquely placed” to be the first to deliver the offering, though it has culled expectations of a listing in the near-term while competitors have hinted at a launch as early as next quarter.

Competition is brewing among firms seeking to be the first to the post with a bitcoin ETF offering on the Australian Securities Exchange (ASX), hot on the heels of the Securities and Exchange Commission’s (SEC) approval for the product in the US.

Presently, bitcoin ETFs are available on Cboe through the Global X 21Shares Bitcoin ETF and Global X 21Shares Ethereum ETF, which remain the only spot cryptocurrency ETFs in Australia.

However, the ASX has proven to be a harder listing to achieve, according to VanEck, which were among the firms in the US, alongside others like Fidelity and Grayscale, authorised to issue securities tethered to the movements of the cryptocurrency.

In Australia, VanEck said they have been engaged with bringing a spot bitcoin ETF to ASX since early 2021.

“We were the first fund manager to work with the regulator and exchange on the mechanics, and the first to formally lodge a submission for a bitcoin ETF to ASX,” Arian Neiron, chief executive and managing director, VanEck Asia-Pacific, said.

He confirmed the firm had resubmitted a bitcoin ETF application to the ASX last month, with plans to be the first to bring the offering to market.

Meanwhile, Brisbane-based Monochrome Asset Management filed an application in July 2023 and has indicated on its website a proposed launch in the second quarter of 2024, subject to regulatory approvals.

According to VanEck’s Neiron, however, approvals are likely to take much longer.

“Contrary to some representations that have recently been made to the media, approval for an ASX-listed bitcoin ETF is not imminent. There are still a number of hurdles from a regulatory and exchange framework perspective that must be worked through as well as approval from ASIC, before we will see a bitcoin ETF on ASX,” he stated.

“What we do know is that there is a higher level of scrutiny and only fund managers that have the experience, capability, resources and investing pedigree will be accepted for admission.”

He observed that VanEck had been the first established ETF issuer to file for a futures-based bitcoin ETF in the US in 2017, followed by a filing for a spot bitcoin ETF in 2018.

“Despite regulatory headwinds in the US, the firm’s digital assets efforts continued with product development and investment globally. The firm’s 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,” Neiron elaborated.

He said there had been a “significant uptick” in queries and requests from the adviser and broker community since the SEC’s decision in January, stating: “The demand for access to bitcoin via a listed vehicle traded on ASX has been increasing and many of our clients have told us that their clients are already positioned to have an allocation ready to invest.”

Growing appetite for crypto

Earlier this year, the SEC’s decision had been viewed as especially noteworthy considering its historical trend of consistently denying approval for bitcoin ETF requests over the past decade, often citing concerns about market manipulation and investor protection.

Weighing in on the change, AMP chief economist Shane Oliver predicted Australian regulators were likely to follow suit.

“This will improve and widen access to bitcoin by making it easier to access via regular investment accounts rather than, e.g., crypto exchanges that have had issues,” Dr Oliver explained.

“It also brings the crypto industry closer to the world of regulated traditional finance.”

Recent figures from the Independent Reserve Cryptocurrency Index (IRCI) also found Australia’s awareness of crypto has hit a new high of 95 per cent as digital currencies embed themselves well within the public eye.

Aussie crypto ownership rates have increased to 28 per cent this year from 17 per cent in 2019.

Chief among investor interest was bitcoin, it stated, which remained a favourite among investors at a 63 per cent ownership rate.