Australia Set to Join Bitcoin ETF Revolution

Bloomberg reports that Australia is set to approve a wave of spot Bitcoin ETF launches by the end of this year. This move follows the success of Bitcoin ETF launches in the US and Hong Kong, and signals a growing acceptance of Bitcoin as an investment asset. The Australian Securities Exchange (ASX) is expected to approve and launch several Bitcoin ETFs before the end of the year, with issuers such as VanEck and BetaShares lined up for listings.

Australia Poised to Embrace Bitcoin ETF Revolution

Bloomberg recently reported that Australia is preparing to approve a surge of spot Bitcoin exchange-traded funds (ETFs) by the end of 2024. This move follows the footsteps of the United States and Hong Kong, where issuers such as VanEck and BetaShares are eagerly awaiting listings.

Australian Securities Exchange: A Gateway for Bitcoin ETFs

The Australian Securities Exchange (ASX) is the primary stock exchange in Sydney and the most prominent in Australia. ASX is a publicly traded company, and its operations should not be conflated with the Sydney Stock Exchange, a separate entity.

Boasting a daily trading volume exceeding AUD 4.6 billion (approximately USD 3 trillion), ASX hosts over 2,000 listed securities and boasts a market capitalization of around AUD 1.6 trillion. It is the largest stock exchange in the entire Southern Hemisphere.

Despite these impressive figures, ASX does not rank among the world's top ten exchanges by market capitalization, trailing behind markets in Hong Kong, London, Frankfurt, and Toronto. In fact, it is also surpassed by the exchanges in Mumbai, Seoul, and Stockholm.

However, ASX outpaces the Toronto Stock Exchange in monthly trading volumes, an anomaly considering that Australia's population of 27 million is significantly smaller than Canada's 38 million.

Bitcoin ETF Landscape in Australia

Currently, there are no spot ETFs for Bitcoin or Ethereum listed on the ASX. However, Bloomberg cites anonymous sources claiming that the exchange will approve and launch several such products before the end of the year.

Issuance requests for these products have been filed in recent months, awaiting regulatory approval. VanEck, a prominent player in the ETF market, has already launched a similar product on the Chicago Cboe exchange.

Hong Kong's Influence and Global Impact

The upcoming debut of BTC and ETH spot ETFs on the Hong Kong Stock Exchange on April 29th has likely accelerated the trend towards Bitcoin ETFs in Australia. The ASX competes with Hong Kong in the Southeast Asian and Oceania market, commonly known as the APAC (Asia-Pacific) region.

Hong Kong's rapid adoption of Bitcoin ETFs has potentially influenced the Sydney Exchange to follow suit, especially considering the success of Bitcoin spot ETFs on US exchanges.

Impact on Bitcoin Price

The impact of Bitcoin ETF approvals in Australia on the BTC price may be limited. The critical factor is the size of the target audience and the capital they attract.

For instance, mainland Chinese investors will not have access to BTC spot ETFs listed on the Hong Kong Stock Exchange, which will only be accessible to Hong Kong residents and local funds. A similar scenario may play out for the Sydney Stock Exchange, primarily frequented by Australians.

While Australians outnumber Hong Kong residents, their GDP is less than a tenth of the US and about a tenth of China's, limiting their potential impact on the Bitcoin market. However, if they attract capital equivalent to one-twentieth of that invested in Bitcoin ETFs on US exchanges, they could potentially exert some minimal influence on the price.

Global Perspective

Beyond Australia and Hong Kong, the discussion shifts to the rest of the world. The United States alone accounts for approximately 25% of global GDP, leaving three-quarters of the world's GDP in other regions.

China and the European Union contribute approximately 16% and 15% to global GDP, respectively. Financial products similar to spot Bitcoin ETFs are available in the EU but not in China, although those launching in Hong Kong will only be accessible to local residents.

Japan and India, with their combined 7% of global GDP, are also significant players to consider.

Currently, only four of the 12 largest stock exchanges by trading volume do not offer spot Bitcoin ETFs, excluding Hong Kong, which will introduce them on April 29th. The Chinese mainland exchanges in Shanghai and Shenzhen could significantly influence the market if they were to follow suit.

The success of Bitcoin ETFs in Australia and Hong Kong, relative to their performance in the United States, could pave the way for the launch of similar products on the Shanghai and Shenzhen exchanges sooner rather than later.