Financial regulators in Australia have given green light to the first Bitcoin ETF to trade on April 27, and The Australian Financial Review reports that it could receive up to $1 billion in flows.
An ETF (exchange traded fund) is a regulated, exchange-traded fund that allows investors to profit from the Bitcoin price (BTC), without having to own any coins.
Cosmos Asset Management won out over local competitors VanEck and BetaShares to become Australia’s first Bitcoin ETF. According to the Sydney Morning Herald, each firm was in the running for regulatory approvals at least since March.
With approval from Australia Securities Exchange (ASX), Clear capital markets clearinghouse, the Cosmos Asset Management Bitcoin ETF will go on CBOE Australia. Cosmos Asset Management Bitcoin ETF was approved after it had landed at least four market participants that could support the 42% margin requirements required to cover risk, as per an April 19 article from the AFR.
The Cosmos Bitcoin ETF provides indirect exposure to spot Bitcoin investing via the Canadian Purpose Bitcoin Exchange Fund.
Kurt Grumelart (a Zerocap trader) described the approval of an ETF as “exciting” and said that it “validates further institution adoption” after the record-breaking launch of Betashares CRYP fund which invests crypto-exposed US shares. The fund received $10M in net inflows in the first ten minutes of its launch in November 2021.
Grumelart anticipates that the new Bitcoin ETF will be equally successful
“The event represents a significant step forward for Australia, and mainstream acceptance of crypto industry in general.”
Grumelart predicts that a successful launch will result in an influx of new players. He said that it was likely that a successful launch would lead to listings for crypto asset-based funds in other markets than Bitcoin.
Cosmos will issue this ETF for crypto-related investments, following the publication of its Global Digital Miners Access ETF last year.
Over the past year, Australian regulators worked to establish clear rules for the cryptocurrency industry. The Australian Securities and Investments Commission (ASIC), wants more control over the industry. Senator Andrew Bragg believes that this is unnecessary until cryptocurrency is recognised as a financial asset in Australian law.
Related: Australian opposition under attack as election draws near: ‘7 words are not a crypto-political’
Grumelart stated that he believes clarification of rules will help the industry’s development.
“As new ASIC regulations governing crypto assets are released, we expect more clarity for local custodians, service providers, and this will open up this avenue within one year.”
Eileen Wilson –Technology and Energy
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