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- Major players like BetaShares and VanEck eyeing listings on ASX, and the introduction of spot Bitcoin ETFs is poised to leverage Australia’s substantial pension market.
- Self-managed superannuation programs, accounting for a quarter of the nation’s retirement assets, present a significant avenue for potential inflows into these ETFs.
As per the latest Bloomberg reports, Australia’s topmost securities exchange ASX Ltd. shall list its first spot Bitcoin ETFs later this year in 2024. This development comes after the strong success of the US Bitcoin ETFs within three months of their launch. Interestingly, the announcement comes just a day before Hong Kong is set to launch its spot Bitcoin ETFs, per Crypto News Flash report.
Currently, ASX handles 80% of equities trading in Australia’s capital market. Thus, the shares of spot Bitcoin ETFs would get greater liquidity and trading volumes with issuers like BetaShares and VanEck lining for listing.
According to Justin Arzadon, the head of digital assets at BetaShares, the substantial inflows in the US validate the enduring presence of digital assets, as reported by Crypto News Flash. Arzadon also mentioned that the company has secured ASX tickers for spot Bitcoin and spot Ethereum ETFs.
Arzadon emphasized that ASX is their preferred listing venue. However, he also highlighted a major concern for ASX, which is ensuring secure custody of the underlying Bitcoin assets for these ETFs. The recent applications mark a second wave of spot-Bitcoin ETF launches in Australia, following the initial listings that took place two years ago on CBOE Australia. Notably, CBOE Australia, the country’s junior exchange, represents less than a fifth of equity trading volume.
In 2022, Sydney-based Cosmos Asset Management introduced a spot Bitcoin ETF, only to delist it later that same year due to minimal inflows. On the other hand, the Global X 21Shares Bitcoin ETF, also launched in 2022, currently boasts approximately $62 million in assets. Monochrome Asset Management, led by former Binance Australia CEO Jeff Yew, has recently applied to launch another spot-Bitcoin ETF on CBOE Australia.
Leveraging Australia’s Pension Market for spot Bitcoin ETF Inflows?
Although several big players plan to introduce a spot Bitcoin ETF in Australia, one of the major challenges ahead of them would be addressing the challenges with inflows. As a result, investors are looking at Australia’s $2.3 trillion pension market.
Approximately 25% of the nation’s retirement assets are allocated to self-managed superannuation programs, granting individuals the autonomy to select their investments. Jamie Hannah, Deputy Head of Investments and Capital Markets at VanEck Australia suggests that these programs could potentially become purchasers of spot-crypto funds.
Hannah further elaborated that with the inclusion of self-managed super funds, along with brokers, financial advisers, and platform money, there exists a substantial addressable market capable of scaling this ETF to a sufficient size.
In February, DigitalX Ltd., another key player in the local market, announced during its half-year results that it had submitted an application. DigitalX CEO Lisa Wade highlighted the potential of cryptocurrencies as “financial rails,” suggesting that Australians could allocate up to 10% of their portfolios to these assets.
Despite the initial excitement surrounding the launch of US spot-bitcoin ETFs, which propelled Bitcoin to an all-time high in mid-March, recent demand for both the products and the digital asset has dwindled. This decline in interest comes amidst diminishing expectations of looser monetary policy.