AUSTRALIA is set for a wave of Bitcoin exchange-traded fund (ETF) launches, following in the footsteps of the US and Hong Kong, as issuers such as Van Eck Associates and BetaShares Holdings line up for listings.

ASX, which handles around four-fifths of the country’s equity trading, is expected to approve the first spot-Bitcoin ETFs for the main board before the end of 2024, according to sources familiar with the matter, who asked not to be identified as the information is private.

The applications come in the wake of the US$53 billion amassed by US Bitcoin ETFs this year, including offerings from BlackRock and Fidelity Investments. Funds investing directly in Bitcoin and Ether are also due to begin trading in Hong Kong on Tuesday (Apr 30). Issuers are seeking to capitalise on a sharp crypto rebound that took Bitcoin to a record of almost US$74,000 last month.

Sydney-based BetaShares is working towards launching a product on the ASX, a spokesperson said. DigitalX, another local player, said in half-year results in February that it had lodged an application. VanEck, which offers similar ETFs in the US and Europe, resubmitted an application in February.

‘Here to stay’

The US inflows “prove digital assets are here to stay”, said Justin Arzadon, head of digital assets for BetaShares. The company has reserved ASX tickers for spot-Bitcoin and spot-Ether ETFs, Arzadon added.

A spokesperson for ASX said the exchange “continues to engage with a number of issuers that are interested in admitting cryptoasset-based ETFs” but refrained from confirming a timeframe.

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Australia’s US$2.3 trillion pension market may help drive inflows. About a quarter of the country’s retirement assets sit in so-called self-managed superannuation programmes that allow individuals to pick their investments. These could emerge as buyers of spot-crypto funds, according to Jamie Hannah, deputy head of investments and capital markets for VanEck Australia.

With self-managed super funds, brokers, financial advisers and platform money, “there is a large enough addressable market here to get this ETF to an adequate size”, Hannah added.

Previous fund closures

The latest applications are a second wave of spot-Bitcoin ETF launches in Australia after initial listings two years ago on CBOE Australia, the country’s junior bourse that accounts for less than a fifth of equity trading volume.

Sydney-based Cosmos Asset Management launched a spot-Bitcoin ETF in 2022 but delisted the fund later that year after meagre inflows. The Global X 21Shares Bitcoin ETF, which launched in the same year, has around US$62 million in assets. Monochrome Asset Management, former Binance Australia chief executive officer Jeff Yew’s company, has recently applied to launch another on CBOE Australia.

ASX is “the exchange we want to list on”, said Arzadon of BetaShares, adding custody of tokens is among the areas the exchange is scrutinising.

Australians could allocate up to 10 per cent of portfolios to cryptocurrencies given their potential as “financial rails”, DigitalX chief executive officer Lisa Wade said.

While the buzz around the debut US spot-Bitcoin ETFs drove Bitcoin to an all-time peak in mid-March, demand for both the products and the digital asset has weakened lately amid waning expectations of looser monetary policy. BLOOMBERG