On October 19, 2021, the ProShares Bitcoin Strategy Stock Exchange Fund (BITO) was launched on the New York Stock Exchange. On the first day of operation of the ETF, its inflows were around $1 billion in kind, and within 24 hours Bitcoin itself (BTC) will reach a new all-time high relative to its US dollar price. This came a week after the US Securities and Exchange Commission granted permission to expire the archive of the ETF, effectively allowing the product to continue.
This represented an important step for the United States, but it also sparked a wave in other markets around the world. If BITO continues to be accepted as it should on day one, there will likely be more and more people to follow. The ETF provides access to derivatives from Bitcoin futures rather than the Bitcoin itself. While purists may find this undesirable, it does provide a significant degree of investor protection against the volatility inherent in Bitcoin. Other products in other markets with a similar philosophy could help assuage concerns that have held institutional players back for years.
The success story in a market like the US certainly casts a positive light on the prospects for similar funds around the world, and bringing attention to Australian institutions could be a boon to both Bitcoin and the nation’s economy. Most importantly, it gave Australia the opportunity to lead financial innovation and fully integrate cryptocurrency into its financial flock.
Australian lawmakers mostly agree. A recent report by the Australian Parliamentary Committee ad hoc Australia as a technology and financial hub proposed a structure that would put Australia on a par with the United States, the United Kingdom and Singapore.
Domino ETF . Effect
With this structure, and following the success of BITO, Australian fund manager BetaShares launched its Crypto Innovators ETF on the Australian Stock Exchange (ASX) under the CRYP ticker. Access to the fund allows investors to track several crypto-focused companies based on the Bitwise Crypto Industry Innovators 30 Index. The main portfolio of the index consists of large cryptocurrency companies such as the popular crypto exchange Coinbase, bitcoin miner Riot Blockchain and Michael Saylor companies. MicroStrategy Business Intelligence Program Development.
The fund broke ASX records within 15 minutes of launch and raised nearly $31.3 million by the end of opening day.
Essentially, by owning stock in a company rather than specific cryptocurrencies such as Bitcoin and Ether (ETH), BetaShares ETFs can give interested clients a unique opportunity to participate in the rapidly growing digital asset market without having to purchase cryptocurrencies directly. . In fact, BetaShares claims that 85% of the index comes from companies that get at least 75% of their revenue directly from the cryptocurrency market or that alternatively hold at least 75% of their assets in direct crypto holdings. This maximizes long-term profits as Bitcoin matures, but also reduces the shock of a market shift, which many believe is almost inevitable.
This could be transformative for both Australia and the wider use of cryptocurrencies. The launch of this ETF gives Australian investors and institutions their first access to Bitcoin, which should allay their concerns about volatility. This, in turn, will increase interest in the Bitcoin economy and will help push up the price of the asset. More importantly, this will be another example of the kind of product in action which, with a little luck, can inspire other markets around the world. Having said that, Australia does not have to wait for a wider distribution in the world when it should be the leader instead.
Similarly, in the middle of Australia’s backyard, New Zealand also saw the launch of its first Bitcoin ETF earlier this month in the form of a new offering called Vault International Bitcoin Fund, or VIBF. VIBF consists of carefully selected offshore Bitcoin funds and other ETFs. This is a first in a stock index and may provide further incentives to regulators who are in the process of rating the first ETF of this type in the Australian market.
On this topic: Australian Senators are pushing the country to become the next cryptocurrency hub
What will come?
The first crypto ETF is a nice development, but it should be the first straw in a big bucket. Honestly, the possibilities of cryptocurrencies and derivatives are almost endless given their huge variety.
