Following U.S., Hong Kong approvals, Australia prepares for Bitcoin ETF wave

The Australian Securities Exchange is expected to approve the first spot Bitcoin ETFs before the end of 2024.

Spot Bitcoin ETFs are making an unprecedented splash in the cryptocurrency industry. Following the United States and Hong Kong, Australia is now gearing up for the launch of a series of Bitcoin exchange-traded funds (ETFs).

The Australian Securities Exchange (ASX) has received applications from at least two organizations and has another in the pipeline.

Australia prepares for Bitcoin ETF

According to a recent report by Bloomberg, ASX Limited, which manages about 80% of equity trading in the country, is expected to approve the listing of the first spot Bitcoin ETFs by the end of 2024.

The filings follow the success of U.S. Bitcoin ETFs, which have raised $53 billion this year. Despite Grayscale's outflows, products from BlackRock Inc. and Fidelity Investments ranked among the top performers.

Starting from April 30, the Hong Kong market will open funds for direct investment in Bitcoin and Ethereum. Fund issuers plan to capitalize on Bitcoin's significant market rebound last month near its all-time high of $74,000, hoping to achieve better investment returns and market performance through this upward trend.

Sydney-based BetaShares is gearing up to launch a new financial product on the Australian Securities Exchange (ASX). According to Justin Arzadon, head of digital assets at BetaShares, recent cryptocurrency inflows into the U.S. market show the increasing acceptance and persistence of this type of asset. The company’s optimism about the market is also reflected in the fact that they have reserved ASX tickers for their upcoming spot Bitcoin and spot Ethereum exchange-traded funds (ETFs). This demonstrates BetaShares’ confidence in the performance of cryptocurrency ETFs in the Australian market and its ability to meet growing investor interest in this emerging asset class.

Although the Australian Securities Exchange (ASX) has not announced a specific timetable for the launch of cryptocurrency-based exchange-traded funds (ETFs), it is reported that ASX is in in-depth discussions with a number of issuers interested in launching such products.

Demand for Spot ETFs

Notably, Australia's $2.3 trillion superannuation market is expected to be a key driver of inflows, especially as about a quarter of retirement assets are held in self-managed superannuation schemes, which allow individuals to independently decide their investment direction.

VanEck, a financial company that offers similar exchange-traded fund (ETF) products, resubmitted its product application in February. Jamie Hannah, deputy head of investments and capital markets at VanEck Australia, suggested that investment vehicles such as self-managed superannuation schemes could become potential buyers of spot cryptocurrency funds. She believes that the growth potential of these ETF products in the market is huge when considering multiple sources of funding such as self-managed super funds, stockbrokers, financial advisors and platform funds.

These recent applications mark the second wave of spot Bitcoin ETF listings in Australia, following its initial launch at CBOE Australia two years ago. While some ETF products launched by Sydney-based Cosmos Asset Management in 2022 did not attract large inflows and were eventually delisted, other ETFs, such as the Global X 21Shares Bitcoin ETF, have managed to accumulate considerable asset sizes. This shows that there is actual market demand for certain cryptocurrency ETF products and that these products can achieve success and recognition in the market.

Meanwhile, Monochrome Asset Management, led by former Binance Australia CEO Jeff Yew, has also applied to launch a spot Bitcoin ETF on CBOE Australia.

BetaShares prefers to list its product on the Australian Securities Exchange (ASX) due to the strict scrutiny ASX imposes on the token’s custody process. In addition, DigitalX Ltd. also announced in February that it had submitted an application to market its product, and its CEO Lisa Wade suggested that Australian investors may consider investing 10% of their portfolios in cryptocurrencies, reflecting her view that Recognition of the potential of cryptocurrencies as emerging financial infrastructure.

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