A Bitcoin and Ethereum exchange-traded fund (ETF) was set to launch in Australia this week but was blocked by an unknown third party broker.
To provide Australian consumers with further accessibility to cryptocurrency with regulated risk, Cosmos Asset Management and 21 Shares had planned to unveil Australia’s first spot-backed cryptocurrency ETFs. ETFs are a common investing method in traditional finance. ETFs reflect a basket of assets which reduces the risk for consumers whilst still allowing exposure to an asset class such as cryptocurrency. The three ETFs set to launch are also unique as they are spot-based. This means that each share of the ETF is backed by actual Bitcoin and Ethereum, as opposed to futures-based cryptocurrency ETFs which merely mimic the price of Bitcoin and Ethereum.
Cboe Australia, a securities and derivatives exchange alternative to the Australian Securities Exchange, which was set to release the cryptocurrency ETFs delayed the launch on the grounds of further time to support fund managers before the launch. The reason for this may be the interconnection of Australia’s cryptocurrency ETFs as Cosmos’ Bitcoin ETF contained a direct investment into the Canadian Purpose Bitcoin ETF.
Despite many asset managers claiming this block to be a minor hiccup, it was estimated that the launch of all three cryptocurrency ETFs would net approximately $1B in seven days. More importantly, this roadblock has made other fund managers such as BetaShares hesitant to lodge their own crypto ETFs on the ASX. Could this all be a ploy to push back cryptocurrency adoption yet again?