U.S. Draws $53 Billion, "Awakens" China! Australia Poised to Follow with "Major Reform"

After the U.S. Bitcoin spot ETF began trading, it raised $53 billion. Chinese media reported that Hong Kong's Bitcoin spot ETF is scheduled to go public this week. With issuers like Van Eck Associates Corp. and BetaShares Holdings Pty lined up for listings, Australia is set to follow the footsteps of the U.S. and Hong Kong by approving Bitcoin spot ETFs.

According to sources who wished to remain anonymous, ASX Ltd., which handles about 80% of the stock trades in the country, is expected to approve the first batch of Bitcoin spot ETFs on its main board by the end of 2024.

These applications were filed following the U.S. Bitcoin ETFs raising $53 billion this year, including products from BlackRock and Fidelity Investments. Spot ETFs directly investing in Bitcoin and Ethereum will also start trading in Hong Kong on Tuesday.

Issuers are looking to capitalize on the sharp rebound in cryptocurrencies, with Bitcoin hitting a near record of $74,000 in March.

A spokesperson for BetaShares based in Sydney mentioned that they are working on launching a product on the Australian Securities Exchange.

Another local firm, DigitalX Ltd., stated in its half-year results in February that it had submitted an application.

VanEck, which offers similar ETFs in the U.S. and Europe, refiled its application in February.

Justin Arzadon, head of digital assets at BetaShares, stated that the influx of funds in the U.S. "proves that digital assets are here to stay." He added that the company has reserved ASX stock codes for spot Bitcoin and Ethereum ETFs.

Source: Bloomberg

A spokesperson for the Australian Securities Exchange mentioned that the exchange "continues to engage with several issuers interested in launching ETFs based on cryptocurrencies," though no timetable was confirmed.

Australia's $2.3 trillion pension market could help boost fund inflows, with about 25% of retirement assets held in self-managed superannuation plans that allow individuals to choose their investments.

Jamie Hannah, Deputy Head of Investments and Capital Markets at VanEck Australia, noted that these individuals could be potential buyers of cryptocurrency spot ETFs.

With self-managed super funds, brokers, financial advisors, and platform funds, "there is a sufficiently large potential market here to scale this ETF," added Hannah.

The latest applications mark the second wave of Bitcoin spot ETF launches in Australia following the initial listing on the CBOE Australia two years ago, where the primary exchanges account for less than 20% of stock trading volume.

Cosmos Asset Management based in Sydney launched a Bitcoin spot ETF in 2022, but it was delisted later that year after modest inflows. In the same year, the Global X 21Shares Bitcoin ETF was launched with approximately $62 million in assets. Jeff Yew's company, Monochrome Asset Management, recently applied to launch another company on CBOE Australia.

Arzadon from BetaShares stated that ASX is "the exchange we want to list on," adding that token custody is one of the areas under review by the exchange.

DigitalX CEO Lisa Wade mentioned that given the potential of cryptocurrencies as a "financial orbit," Australians could allocate up to 10% of their investment portfolios to cryptocurrencies.

Despite the excitement around the U.S.'s first Bitcoin spot ETF launch, which led to Bitcoin reaching a new high in mid-March, demand for this product and digital assets has recently weakened due to diminished expectations for loose monetary policy.