Australia's pension market may boost Bitcoin ETF inflows.
The Australian Securities Exchange (ASX), Australia’s primary securities exchange, is expected to list the first spot Bitcoin exchange-traded funds (ETFs) on its main board by the end of 2024, Bloomberg reported today, citing anonymous sources close to the matter.
As a key player in Australia’s capital markets, ASX handles about 80% of equity trading, said Bloomberg. Issuers like VanEck and BetaShares are lining up for listings on the exchange.
Justin Arzadon, head of digital assets at BetaShares, told Bloomberg that the US massive inflows “prove digital assets are here to stay.” He added that the company has secured ASX tickers for spot Bitcoin and spot Ethereum ETFs.
Arzadon said ASX is their preferred listing venue. However, he also noted one major concern for ASX is to ensure secure custody of the underlying Bitcoin assets for these ETFs.
DigitalX, an Australia-based technology and investment company, also announced in its semi-annual results that it had submitted an ETF application. VanEck, already offering similar ETFs in the US and Europe, resubmitted an application in February, Bloomberg noted.
An ASX spokesperson mentioned ongoing discussions with multiple issuers interested in launching crypto asset-based ETFs but did not confirm a specific timeline.
The anticipated approval follows the US and Hong Kong’s lead. US spot Bitcoin ETFs have amassed $53 billion this year, with BlackRock and Fidelity Investments among the issuers. Meanwhile, direct investment funds in Bitcoin and Ether are set to start trading in Hong Kong on Tuesday.
Another driving force behind the move is Australia’s $2.3 trillion pension market, which could significantly contribute to ETF inflows.
Approximately a quarter of the country’s retirement assets are in self-managed superannuation programs, which could become key investors in spot-crypto funds, Jamie Hannah, VanEck Australia’s deputy head of investments and capital markets told Bloomberg.
Hannah believes that with the combined interest from self-managed super funds, brokers, financial advisers, and platform money, the ETF could reach a substantial size.
DigitalX CEO Lisa Wade suggested that Australians could allocate up to 10% of their portfolios to cryptos, citing their potential as “financial rails.”
Previous attempts and challenges
This is not the first attempt at launching Bitcoin ETFs in Australia. Two such ETFs debuted on CBOE Australia in 2022 but one was delisted.
Global X 21Shares Bitcoin ETF is currently the only spot Bitcoin ETF in the country. Issued by 21Shares and Global X ETFs (formerly known as ETF Securities) in 2022, the fund now holds about $62 million in assets.
Cosmos Asset Management also launched a spot Bitcoin ETF that year but delisted it due to low inflows.
Monochrome Asset Management, led by former Binance Australia CEO Jeff Yew, has applied to launch another ETF on CBOE Australia.
