Australia to Greenlight Bitcoin ETF with Initial Crypto Demand Testing

The Bitcoin craze is growing in Australia. Following the recent official crypto legislation, traders and crypto enthusiasts can venture into newer forms of crypto innovation based on future valuations, including Bitcoin ETFs. The initial stage, however, will be to determine the product’s demand among crypto traders and investors. 

Bitcoin ETF Ventures

Cosmos Asset Management acknowledged its intentions to launch the Cosmos Purpose Bitcoin Access ETF in the upcoming days. The collected funds will be invested in the Toronto-based Purpose Bitcoin ETF. The Canadian asset management ETF has an estimated capital of 1.6 Billion Canadian Dollars(USD 1.3 billion). The product will be launched next week once it receives the final regulatory green signal, according to an interview statement by Cosmos CEO Dan Annan.

On the other hand, 21Shares AG partnered with ETF Securities and hopes to release BTC and ETH-linked funds by the 27th of April this year. The backed tokens will be placed in cold wallet storage by a leading global crypto exchange. Harry Rashwan, the company’s CEO and co-founder, is optimistic about the project, remarking that the aforementioned Australian development is 21Share’s first expansion move outside of Europe.   

Also Read: HashCash to Provide an Australian Crypto Enterprise with Blockchain and Cryptocurrency Solutions

What are Exchange Traded Funds(ETFs)?

ETFs operate on the basis of pooled investments. In some ways, they are similar to mutual funds, but the difference lies in the available trade options. ETFs offer conventional stock equity trading features within a single exchange. They can be used to trade in single as well as multiple asset options, in addition to tracking specific strategies for investment. 

Day trading i.e. buying and selling within the day is applicable for ETFs, and it leads to intra-day fluctuations in their valuations. ETFs also comprise multiple investment types at both national and international levels. This facilitates traders in gaining lower expense ratios and brokerage.

Crypto ETFs

Crypto ETFs, as one would guess, focuses on the valuation of cryptocurrencies. The merits include low ownership costs, asset diversification, and knowledge outsourcing. Crypto ETFs present an opportunity for investors to leverage gains from the wild-swinging crypto markets without significant capital allocation or worries about asset management. 

Under broad categorization, crypto ETFs either:

1. Invest and back actual cryptocurrencies.
2. Invest in derivatives, contracts, futures, or crypto ETPs.    

ETF Developments Around the World

Bitcoin ETF gained mainstream popularity as a trading option in the previous year after the US permitted a fund operating on BTC futures. This propelled bitcoin’s prices to an all-time high touching the $69,000 mark. However, strict subsequent monetary policies by the Federal Reserve drained the associated hype in present days, alluding to them as risky investment choices. Bloomberg Intelligence reports that the US maintains its predominance in market valuations of crypto funds under public listing at 74%. Europe ranks 2nd at 15%, while Canada is in 3rd position at 9%.

Wrapping Up

The growing adoption of digital assets could promote Australia’s position as a frontrunner for crypto ETFs across the Asia- Pacific region. In comparison to the US which has been setting frameworks for crypto ETFs since 2013, things may look bright for Australia as it shifts forward to leverage the best growth from cryptocurrencies and digital assets.