Mar. 27, 2022 | BUSINESS

Crypto Tracking Exchange-Traded Funds (ETF) on the Verge of becoming available

The race to list the first exchange-traded fund (ETF) that follows cryptocurrency values on the Australian stock exchange is heating up.

The race to list the first exchange-traded fund (ETF) that follows cryptocurrency values on the Australian stock exchange is heating up, with at least three contenders finalizing regulatory clearances.

BetaShares, EFT Securities, and VanEck, among other local ETF providers, are seeking for first-mover advantage in the hopes that Australian-listed crypto ETFs will be well-supported by investors.

Crypto ETF

The first Bitcoin ETF listed in the United States started trading in October 2021. It debuted as one of the most heavily traded ETFs ever, attracting more than $1 billion in the first few days. Technically, it does not store Bitcoin, but rather Bitcoin futures.

Units in ETFs can be bought and sold in the same way that shares in publicly traded businesses can. They monitor the pricing of all types of markets. Crypto ETFs are convenient for investors who would otherwise face the inconveniences of owning crypto directly, such as the requirement to go through an exchange and have passwords and digital wallets to invest in digital assets.

VanEck Asia Pacific CEO and Managing Director Arian Neiron says the company is taking its time to get it right. He claims that the ETFs that would follow Bitcoin and Ether will be liquid and cost-effective.

Australian Securities approved crypto ETFs

The Australian Securities and Investments Commission approved crypto ETFs last year, but the firms must meet a series of conditions designed to protect investors before the ETFs can be launched.

According to Vynokur, his company may not be ready to launch crypto ETFs until later this year.

‘Crypto ETFs may provide the extra layer of security that many ETF investors seek.’

A study conducted by Investment Trends in collaboration with BetaShares found that over 20% of current ETF investors would like to gain access to crypto ETFs.

That is double the level of interest in 2020. The ETF sector is rapidly growing. Investment Trends estimates that more than 1.7 million people are invested in ETFs – 33 per cent more than a year ago. Just over 20 per cent of new ETF investors are females aged between 18 and 34 years old.

“Direct access to crypto is regarded to be more dangerous than any alternative [such as crypto ETFs] that would contain a regulatory stamp of approval,” says Irene Guiamatsia, head of research at Investment Trends.

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