Australian Crypto Market to Skyrocket with Impending Approval of Spot Bitcoin ETFs

Australia's financial hub, the Australian Securities Exchange (ASX), is on the cusp of approving the country's first spot Bitcoin exchange-traded funds (ETFs). This move has the potential to unlock a surge of $3-$4 billion in net inflows within the next three years, bolstering Australia's burgeoning crypto market and providing investors with regulated access to Bitcoin exposure.

Australia's Crypto Market to Surge with Anticipated Approval of Spot Bitcoin ETFs

Australia's preeminent stock exchange, the Australian Securities Exchange (ASX), stands poised to grant its blessing to the first spot Bitcoin exchange-traded funds (ETFs). This momentous development holds the potential to unleash a veritable flood of $3 to $4 billion in initial inflows over the ensuing three years, further solidifying Australia's position as a formidable force in the global crypto market landscape.

Following in the footsteps of their counterparts in the United States and Hong Kong, Australia's leading ETF issuers, VanEck Australia and BetaShares, have submitted applications for Bitcoin ETFs, which are now anticipated to receive the green light from the ASX before the year's end, according to confidential sources.

The upsurge in applications for spot Bitcoin ETFs mirrors a similar trend in the United States, where the approval of Bitcoin ETFs has resulted in a staggering $53 billion in assets under management (AUM) across a diverse portfolio of eleven distinct products.

The substantial inflows into these U.S.-based products have instilled confidence within the industry, prompting companies to venture into the Australian market and "demonstrate that digital assets are here to endure," as expressed by Justin Arzadon, BetaShares' Head of Digital.

In an interview with Cointelegraph, Jeff Yew, CEO of the crypto asset management firm Monochrome, which has also submitted an application to a rival exchange, characterized Australia as a "crypto-heavy nation," projecting that Australian spot Bitcoin ETFs will attract a staggering $3 billion to $4 billion in net inflows within the first three years.

Yew attributed the anticipated demand for Bitcoin ETFs to a confluence of factors, including the desire of fund managers to gain exposure to Bitcoin, the needs of self-managed super fund (SMSF) investors, and a more moderate but still significant interest from retail investors.

Presently, SMSF investors engage directly with crypto exchanges to acquire Bitcoin, an approach that Yew deems inherently risky and akin to a "ticking time bomb" in the event of an exchange failure.

"The Australian Taxation Office reports that over $1 billion worth of crypto is held on exchanges, with the lion's share belonging to SMSF investors," he stated.

In contrast to this precarious method, Bitcoin ETFs offer these investors a carefully regulated and hence more secure avenue to access digital assets, Yew emphasized.

Monochrome initially submitted its application for a spot Bitcoin ETF with the ASX on July 14, 2018. However, due to the ASX's protracted approval process, the company shifted its application to Cboe Australia, a considerably smaller exchange.

"We made the switch because Cboe offers a more realistic time frame for approval and a more transparent listing framework," Yew explained.

"It's no secret that the ASX has faced challenges with the regulator lately," Yew added, attributing the exchange's slow pace of innovation to a perceived limited appetite for introducing new products.

Yew expressed optimism that Cboe Australia would approve his firm's application "within the next few weeks."

This anticipated approval of spot Bitcoin ETFs by the ASX marks a pivotal moment for Australia's crypto market. It is poised to inject billions of dollars into the ecosystem, bolstering the country's reputation as a hub for digital asset innovation and attracting a wider spectrum of investors to the burgeoning crypto landscape.