According to a report by the Australian Financial Review, the long-awaited Australian bitcoin exchange traded fund (ETF) has been given the go-ahead by regulators and may be open for trading within a week on the Cboe equities trading venue:
Bitcoin ETF Approved … Finally
As reported by Crypto News Australia last week, one of the major obstacles holding up approval of a local spot-based bitcoin ETF was the high margin requirements required of ETF providers – 42 percent against each trade.
ASX Clear, Australia’s equity clearing house, has now revealed that of the 35 applicants, only four were willing to stump up the tough margin requirements needed to cover the settlement risks of a bitcoin ETF.
We are now at our minimum number of clearing participants and that means we are good to go.
Hamish Treleaven, ASX chief risk officer
ASX chief risk officer Hamish Treleaven is expected to issue a notice today giving brokers, clearers, market makers and investors sufficient time to digest the news. Estimates vary, but some speculate that over A$1 billion could flow into Australia’s first bitcoin ETF – the Cosmos Asset Management bitcoin ETF (CBTC) – which may begin trading as soon as April 27.
Just the Beginning
Rather than having local bitcoin custodial services, CBTC has opted for the Winklevoss-powered exchange, Gemini:
Furthermore, as one half of the Winklevoss twins notes, the product is essentially a “fund of funds” as it invests in Canada’s Purpose Bitcoin ETF:
Expect the Floodgates to Open
Risk-averse regulators have treaded cautiously to date as they wade into uncharted territory, perhaps explaining why it has taken upwards of two years for a bitcoin ETF to be approved. Now that the mould has been broken, expect a slew of competitors to follow suit, each with its own custody and fee structure.
Although unconfirmed, it’s been reported that other fund managers are already working on a bitcoin ETF, including ETF Securities, VanEck Australia, BetaShares and Monochrome Asset Management.
While individuals in search of financial self-sovereignty may scoff at the notion of a bitcoin ETF – not your keys, not your coins – for many institutional investors, it is precisely the investor product (and green light) they were looking for:
The approval of the CBTC is a vote of confidence in the asset. Investment professionals wanting exposure will likely view the approval as reducing their career risk.
CBTC opens the door to Australian asset managers and superannuation funds that have sat on the sidelines pending a local regulatory stamp of approval. Now they’ve got it, it will be fascinating to see whether the uptake is as strong as predicted.
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