Australia Prepares to Launch Spot Bitcoin ETFs by End of 2024

Australia is on the cusp of introducing its first spot Bitcoin exchange-traded funds (ETFs) by the end of 2024, following in the footsteps of the United States and Hong Kong.

This development signifies a growing global acceptance of cryptocurrencies as legitimate investment vehicles and is expected to significantly impact the Australian investment landscape.

TLDR

• Australia is preparing to launch its first spot Bitcoin ETFs by the end of 2024, following the success of similar products in the United States and Hong Kong.
• Major issuers such as Van Eck Associates Corp. and BetaShares Holdings Pty are lining up for listings on the Australian Securities Exchange (ASX).
• The U.S. spot Bitcoin ETFs have amassed $53 billion in assets this year, including offerings from BlackRock Inc. and Fidelity Investments.
• Australia’s $2.3 trillion pension market, especially the self-managed superannuation funds (SMSFs), is expected to play a significant role in driving inflows into spot crypto ETFs.
• The move marks a second attempt to launch spot Bitcoin ETFs in Australia, following the initial listings on CBOE Australia two years ago, which struggled to gain traction.

According to Bloomberg, major issuers such as Van Eck Associates Corp. and BetaShares Holdings Pty are eagerly awaiting approval from the Australian Securities Exchange (ASX) to list their spot Bitcoin ETFs on the main board.

The ASX, which handles 80% of the nation’s stock trading, is anticipated to give the green light to these financial products by late 2024.

The move is inspired by the remarkable success of spot Bitcoin ETFs in the United States, which have amassed an impressive $53 billion in assets this year alone.

Offerings from financial giants like BlackRock Inc. and Fidelity Investments have contributed significantly to this total, demonstrating the growing demand for regulated cryptocurrency investment options.

Australia’s decision to welcome spot Bitcoin ETFs comes at a time when the cryptocurrency market has experienced significant gains, with Bitcoin reaching an all-time high of $72,689 on March 13.

This bullish trend has attracted ETF issuers looking to capitalize on the potential for continued growth in the digital assets space.

One of the key factors that sets Australia apart from other markets is its robust pension sector, worth $2.3 trillion. Approximately 25% of this value resides in self-managed superannuation funds (SMSFs), which allow individuals greater control over their retirement savings.

Industry experts, such as Jamie Hannah, deputy head of investments for VanEck Australia, believe that these SMSFs could become major players in the Bitcoin ETF market.

Hannah highlights the vast potential of the crypto industry across various sectors, including SMSFs, brokers, advisors, and platforms. The combination of these domains could establish a strong investor base, ensuring the success of the upcoming Bitcoin ETFs.

However, this is not Australia’s first attempt at launching spot Bitcoin ETFs. Two years ago, CBOE Australia, a smaller exchange with lower trading volume, introduced the first spot Bitcoin ETFs in the country.

Unfortunately, these initial offerings struggled to gain traction, with Cosmos Asset Management, a Sydney-based firm, eventually delisting its Bitcoin ETF in 2022 due to insufficient inflows.

Despite the previous setback, industry experts are optimistic about the prospects of listing on the ASX. Justin Arzadon, head of digital assets for BetaShares, emphasizes the importance of joining the renowned exchange and highlights token custody as a key aspect scrutinized by the ASX.

While the recent dip in Bitcoin prices has raised concerns among some investors, Australian experts remain confident in the long-term potential of digital currencies.

Lisa Wade, CEO of crypto investment firm DigitalX, believes that Australians could allocate up to 10% of their portfolios to cryptocurrencies, given their potential to revolutionize finance.

As Australia prepares to launch its spot Bitcoin ETFs, the global cryptocurrency landscape continues to evolve.

Hong Kong is set to begin trading Bitcoin and Ethereum ETFs on April 30, further solidifying the acceptance of digital assets in traditional financial markets.

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