With crypto markets tanking, three crypto-focused exchange-traded funds (ETFs) picked a difficult day to commence trading on local exchange Cboe Australia today.
The trio’s launch marks the first crypto ETFs to go live in Australia, with two of them focused on offering exposure to Bitcoin (BTC) and the other focused on Ethereum (ETH).
So far the three ETFs have generated more than $1.3 million between them, and it has been estimated that they could see around $1 billion worth of inflows moving forward.
The Cosmos Purpose Bitcoin Access ETF (CBTC) from Sydney-based crypto investment firm Cosmos Asset Management offers a relatively indirect route to BTC, as it “approximately tracks the performance of the USD denominated ETF non-currency hedged units (Purpose ETF Units) in the Purpose Bitcoin ETF.”
The other two ETFs were developed by ETF Securities in partnership with major Switzerland-based exchange-traded products (ETP) provider 21 Shares. The funds are called the Bitcoin ETF (“EBTC”) Ethereum ETF (“EETH”). They both track the Australian dollar (AUD) value of their respective assets.
According to Cboe data at the time of writing, 21 Shares EBTC and EETH have seen 125,271 and 142,206 shares trade hands, which accounts for roughly $519,874 and $416,663 in volume respectively.
Cosmos Asset Management’s fund has had a relatively slower start at 51,572 shares traded for a total of $398,135, however activity could soon pick up as given that the firm has waived fees on CBTC for two months to attract institutional interest.
Speaking on the launch with Cryptox, ETF Securities Head of Distribution, Kanish Chugh noted that while it was a difficult time to launch amid the crashing crypto market, it also provides investors with a reasonable chance to get some skin in the game:
“Given how volatile markets are now in the short term it will be hard to determine how Bitcoin and Ethereum will perform. What we are seeing though is with Bitcoin coming off more than 50% from its 2021 high, investors are considering the current volatility as providing them with an opportunity to invest. “
“Our crypto ETFs are physically backed and tracks the underlying price of Bitcoin and Ethereum and we have high hopes that EBTC and EETH will be a success in the long term,” he added.
In a public announcement, ETF Securities Chairman Graham Tuckwell also emphasized the significance of launching crypto ETFs in a local context given the stature of BTC and ETH.
“The market capitalization and trading volumes for these two leading cryptocurrencies are now larger than any company listed on the Australian stock exchanges, yet investors have not been able to gain access to them in a regulated manner,“ he said.
Not everyone was as bullish despite the landmark moment however, with Kraken’s Managing Director for Australia Jonathon Miller hailing this “significant milestone for the maturation of the digital assets space” while pointing out investors could already buy Bitcoin.
“However, it isn’t necessarily a watershed moment for accessibility. We must remember that individual investors can already buy Bitcoin directly and each layer of abstraction away from the underlying asset can add risk and cost,”
