When the Cosmos Asset Management Bitcoin ETF launches on ASX Clear next week, Australian investors will be able to trade the country’s first Bitcoin spot ETF.
The Australian Financial Review reports that financial regulators have approved Australia’s first Bitcoin (BTC) exchange-traded fund (ETF) to begin trading on April 27 and that it could see up to $1 billion (R15bn) in inflows.
An ETF is a regulated exchange-traded fund that allows investors to profit from the price of Bitcoin without directly owning any coins.
Cosmos Asset Management was chosen over local rivals VanEck, BetaShares, and EFT Securities to launch Australia’s first Bitcoin ETF. According to the Sydney Morning Herald, each company has been vying for regulatory approvals since at least March.
The Cosmos Asset Management Bitcoin ETF has been approved for listing on CBOE Australia by the Australia Securities Exchange (ASX) Clear capital markets clearinghouse. According to an article published by AFR on Tuesday, approval was granted after Cosmos secured a minimum of four market participants to support the 42 percent margin requirements needed to cover risk.
Through the Canadian Purpose Bitcoin ETF, the Cosmos Bitcoin ETF provides indirect exposure to spot Bitcoin investing.
Kurt Grumelart, a trader at Australian wealth management firm Zerocap, described the ETF approval as “exciting,” adding that it “validates further institutional adoption” following the record-breaking launch of the Betashares CRYP fund, which invests in crypto-exposed US Shares.
The fund received $10 million (R150m) in net inflows within the first ten minutes of its launch in November 2021.
Grumelart anticipates that a successful launch will result in an influx of new players. “If overseas markets are any indication, a successful launch will almost certainly result in a slew of listings for crypto asset-based funds outside of Bitcoin,” he said.
Cosmos will issue its second crypto-related ETF since last year when it launched the Global Digital Miners Access ETF.
Over the last year, Australian regulators have been working hard to establish clear rules for the cryptocurrency industry. The Australian Securities and Investments Commission (ASIC) wants more control over the industry, but Senator Andrew Bragg believes this is premature until cryptocurrency is recognized as a financial asset under Australian law. Grumelart believes that clarifying the rules will help the industry develop.
“As the new ASIC regulations governing crypto assets become available, we expect greater clarity for local custodians and service providers, opening up this avenue within the next year.”