Technology

More than USD 1,000 million would enter Bitcoin if this ETF from Australia was launched

Key facts:
  • Chief Risk Officer of Australia’s Major Stock Exchange Gave the Green Light to Allow Bitcoin ETFs

  • The product will not invest directly in the cryptocurrency, but in shares of a spot ETF

Cosmos Asset Management will launch Australia’s first bitcoin exchange-traded fund (BTC ETF) on April 27 on stock trading platform Cboe, the Australian Financial Review reported. A milestone that demonstrates the importance that cryptocurrency derivatives are having in institutional markets around the world.

This is expected given that ASX Clear, the Australian equity clearinghouse, has confirmed that it has four market participants that will meet the 42% initial margin requirements on such date. This may pave the way for the Australian National Stock Exchange to start listing bitcoin ETFs.

It is speculated that this bitcoin ETFoin from Australia towill cover USD 1,000 million that will enter the cryptocurrency market, according to reports. This could eventually see the price of BTC benefit next week if it generates a lot of interest among investors.

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Although it is worth clarifying that the derivative proposed by Cosmos Asset Management will not invest in the cryptocurrency directly, but in shares of another fund. Precisely in the first spot bitcoin ETF in North America, which is from the company Purpose Investment and has been listed on the Toronto Stock Exchange, Canada, since the beginning of 2021.

That turns Cosmos into a derivative based on another bitcoin investment derivative, forgive the redundancy. Instead, a so-called spot bitcoin ETF invests directly in the cryptocurrency, which Purpose Investment does. Something that countries like the United States do not yet allow, where there are only BTC futures exchange-traded funds, although it is estimated that one of this type will be launched by 2023, CriptoNoticias reported.

Cosmos is already familiar with the BTC fund industry because it is owned by bitcoin miner Mawson Infrastructure Group. This Nasdaq-listed company invested last year in other mining companies through the Global Digital Miners Access ETF.

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EFT
Australia’s first bitcoin ETF to be listed on Cboe with approval from ASX Clear. Source: Pexels.

Australia’s Major Stock Exchange Clearinghouse Greenlights Bitcoin ETFs

Australia joins the movement of bitcoin ETFs, but not before making a regulation for this market. It was stated that the market participants agreed on strict requirements to carry out the launch of the derivative.

The main reason for this preventive measure is to cover the risks triggered by the price variability of the cryptocurrency, experts point out. “That means we’re ready to go,” said Hamish Treleaven, the chief risk officer at ASX, Australia’s largest stock exchange.

In addition to Cosmos, other asset management companies could then launch bitcoin-linked ETFs in Australia. According to the media, those interested in doing so are VanEck, ETF Securities, BetaShares and Monochrome Asset Management.

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