The Australian Securities Exchange (ASX), the country’s largest stock exchange accounting for around 90% of Australia’s equity market, is expected to approve the first batch of spot Bitcoin exchange-traded funds (ETFs) before the end of 2024.
This development comes as the momentum for Bitcoin ETFs in and around Asia has picked up following the approvals in the United States.
TLDR
- The Australian Securities Exchange (ASX) is expected to approve the first batch of spot Bitcoin ETFs before the end of 2024.
- At least two entities, DigitalX Ltd. and VanEck, have already applied with the ASX, while BetaShares is working towards launching a product on the ASX.
- The momentum for Bitcoin ETFs in and around Asia has picked up after U.S. approvals, with Hong Kong officially approving the first batch of spot Bitcoin and Ether ETFs last week.
- Australia’s spot Bitcoin ETFs could see $3 billion to $4 billion of inflows within the first three years, according to Monochrome CEO Jeff Yew.
- Investors in Australia have been trading spot Bitcoin ETFs since 2022, currently listed on CBOE Australia, a smaller rival of ASX.
According to Bloomberg’s report, which cited people familiar with the matter, at least two entities have already applied for spot Bitcoin ETFs with the ASX.
DigitalX Ltd. submitted an application in February, while VanEck resubmitted its application the same month, as announced last month.
Additionally, Sydney-based BetaShares informed Bloomberg that it is working toward launching a spot Bitcoin ETF product on the ASX.
The ASX has not officially commented on the specific applications but stated that it “continues to engage with a number of issuers that are interested in admitting crypto-asset-based ETFs.” The exchange had previously told CoinDesk in January that it “does not comment on investment product applications.”
The potential approval of spot Bitcoin ETFs in Australia comes on the heels of significant developments in the crypto ETF space globally.
Last week, Hong Kong officially approved the first batch of spot Bitcoin and Ether ETFs, following in the footsteps of the U.S., where 11 spot Bitcoin funds have amassed a staggering $53.16 billion in total net assets since their introduction in January, exceeding pre-launch expectations.
The Australian crypto industry is optimistic about the potential impact of spot Bitcoin ETFs on the local market.
Jeff Yew, the CEO of crypto asset management firm Monochrome, which has an application with a competing exchange, Cboe Australia, described Australia as a “very crypto-heavy country” and expects Australian spot Bitcoin ETFs to generate between $3 billion to $4 billion in net inflows within the first three years.
Australia 🇦🇺 joins the #Bitcoin race.#spot #bitcoinetf @MonochromeAsset https://t.co/hqXb9RY5HL pic.twitter.com/KEEXHQ9Eo6
— Jeff (@jeffyew_) July 13, 2023
Yew explained that the demand for the Bitcoin ETFs would be driven primarily by fund managers looking to gain exposure to Bitcoin and from self-managed super fund (SMSF) investors, as well as a smaller, yet still considerable appetite from retail investors.
Currently, SMSF investors hold direct exposure to Bitcoin on crypto exchanges, which Yew believes is inherently risky and feels like a “ticking time bomb” if crypto exchanges were to collapse.
“The Australian Taxation Office says there’s over $1 billion of crypto on exchanges and the majority of this is from SMSF investors,” he said, adding that Bitcoin ETFs, being heavily regulated, would provide these investors with a safer exposure to digital assets.
While Monochrome initially applied for a spot Bitcoin ETF with the ASX in July 2022, the firm later switched to Cboe Australia, a much smaller exchange, due to a slow approval process at the ASX.
Yew stated, “We switched to Cboe because it’s an exchange that offers a more realistic time frame and a more transparent listing framework. It’s no secret that the ASX had challenges lately with the regulator. I think that’s just the appetite to push for new products is limited.”
Yew expects Cboe Australia to approve Monochrome’s application “within the next few weeks.”
It’s worth noting that investors in Australia have been trading spot Bitcoin ETFs since 2022, currently listed on CBOE Australia. The Global X 21Shares Bitcoin and Ethereum ETFs are the only two spot crypto funds available in Australia as of now, according to CBOE Australia’s website.
