Australia now has two spot Bitcoin ETFs

[nullama]

On 12 April 2022 Cboe Australia Pty Ltd has started offering an ETF that follows the price of Bitcoin, called ETFS 21Shares Bitcoin ETF, provided by Australian company ETF Securities:

ETFS 21Shares Bitcoin ETF aims to provide investors with a return that (before fees and expenses) tracks the price of Bitcoin in Australian dollars.

The custodian of this fund's bitcoins is Coinbase Custody Trust Company, LLC ("Coinbase"). More details about this fund here: https://www.cboe.com.au/disclosures/EBT120522001.pdf


The second ETF is called Cosmos Purpose Bitcoin Access ETF and comes from start-up Cosmos Asset Management:

The investment objective of the Fund is to provide an investment that approximately tracks the performance of the USD denominated ETF non-currency hedged units (Purpose ETF Units) in the Purpose Bitcoin ETF. The Purpose Bitcoin ETF is a trust established under the laws of the Province of Ontario, Canada, and is quoted on the Toronto Stock Exchange (TSX). The Purpose Bitcoin ETF is managed by Purpose Investments Inc. (Purpose Investments) and has been established to buy and hold substantially all of its assets in long-term holdings of Bitcoin and seeks to provide investors with the opportunity for long-term capital appreciation.

The custodian of this fund's bitcoins is State Street Australia Limited. More details about this fund here: https://www.cboe.com.au/disclosures/CBT120522002.pdf


In both cases a user buys/sells units of the ETF (Coin Interests and Creation Units, respectively). These units represent a certain amount of Bitcoin being held by the fund, minus any applicable fees.

Not really sure what's the advantage of investing in a spot Bitcoin ETF instead of buying Bitcoin directly though.

[mk4]

Grayscale's Bitcoin fund is actively being pushed[1] by Michael Saylor (and Grayscale themselves, obviously) — and the fact that the SEC still isn't doing anything about it, I'm really really convinced that the SEC is totally acting maliciously here. Approving a futures ETF but not approving a spot ETF is just mind boggling.

[1] https://www.cnbc.com/2022/05/11/grayscale-tells-sec-that-turning-biggest-bitcoin-fund-into-etf-will-unlock-8-billion-for-investors.html

[FinallyRegistered]

A spot ETF is what the public wants.  The SEC needs to quit making these power moves by stalling.  I'm surprised we aren't seeing a bigger push by JP Morgan, et al because there's a LOT of money in it for them.  It's only a matter of time in my opinion.  And when it happens, there will be fireworks.

And as much as that excites me (the price action), it doesn't come close to the excitement of bitcoin giving me the freedom to spend my money the way that I want to.  No other asset gives me such freedom to transact.  Truly, one of the most beautiful things I've seen in my 50 years on this rock.

[Lucius]

Not really sure what's the advantage of investing in a spot Bitcoin ETF instead of buying Bitcoin directly though.

The advantage is that in this way investors do not have to have direct connections with Bitcoin, and yet in some way invest in the same. If you are buying directly, then you need to have a crypto exchange account, make a KYC and finally make sure you have secure storage for what you bought. Buying a stake in a fund that buys BTC for you definitely makes things easier for those who want to avoid it all. Of course, this is not exactly what we advocate at the forum all the time, but these big investors who will use such ETFs do not care too much about private keys and decentralization. Their goal is to make as much profit as possible.

Grayscale's Bitcoin fund is actively being pushed[1] by Michael Saylor (and Grayscale themselves, obviously) — and the fact that the SEC still isn't doing anything about it, I'm really really convinced that the SEC is totally acting maliciously here. Approving a futures ETF but not approving a spot ETF is just mind boggling.

The SEC is just very cautious about approving it because realistically not much has changed from what they cite as major problems all along. Manipulating the market we are witnessing these days only makes the whole thing more difficult, but if the SEC waits for Bitcoin to no longer be volatile, then this type of ETF will be on hold for a very long time.

[mk4]

The SEC is just very cautious about approving it because realistically not much has changed from what they cite as major problems all along. Manipulating the market we are witnessing these days only makes the whole thing more difficult, but if the SEC waits for Bitcoin to no longer be volatile, then this type of ETF will be on hold for a very long time.

It's funny because having a Bitcoin spot ETF would actually bring a good amount of liquidity to bitcoin, hence making it a bit less volatile to a certain extent lol; and at the same time a futures ETF actually kinda helps bitcoin to be more volatile. Quite ironic.

[Lucius]

It's funny because having a Bitcoin spot ETF would actually bring a good amount of liquidity to bitcoin, hence making it a bit less volatile to a certain extent lol; and at the same time a futures ETF actually kinda helps bitcoin to be more volatile. Quite ironic.

It may not be something that is talked about a lot, but although most agree that the ETF spot will pump the price, the long-term consequences could be very bad for Bitcoin. People who will buy Bitcoin in this way will also sell it and certainly make the market even more volatile, so it does not seem to me that volatility would disappear or become less.

The biggest irony in all this will be if the SEC finally gives the green light, and it turns out that the interest in something like this is not even half as we imagined. This is the case at least in those countries where this way of trading with BTC is already approved.

[mk4]

People who will buy Bitcoin in this way will also sell it and certainly make the market even more volatile, so it does not seem to me that volatility would disappear or become less.

That's really not how it works. If a certain asset has increased liquidity through things like an ETF, increased stability is almost guaranteed. To what extent, is the question; maybe just to a minor degree, but it still helps.

[Vatimins]

     Well, in what I have learned so far, as long as it is an ETF, it is good news and depending on the place where it is approved, it can be just bullish or mega bullish. This is because it not only spreads the name of bitcoin but it also enables the people who have little to no knowledge about bitcoin to still be able to get their hands on some profits. There are also people who know a lot about bitcoin but are too lazy to go through all the trouble of creating an account on an exchange or preparing a secure wallet etc., just to be able to invest on bitcoin. Of course, on the perspective of a crypto enthusiast ETFs aren't essential but for the normal people outside of this industry, it is an amazing opportunity.

[markko7]

I don`t see a point keeping money in Bitcoin ETF while you can just buy and keep bitcoin.

[CaVO32]

I don`t see a point keeping money in Bitcoin ETF while you can just buy and keep bitcoin.

As Vatimins mentioned below, there are people who will look at this ETF as important one to explore their opportunity in crypto. Of course, for most crypto users here, for them, they won't need this ETF to deal with crypto. However, think of other people who are not very familiar with crypto and want to get a hold in this market. This will also add credibility in this market. Remember, a lot of people outside this industry has their hesitations to get involved because of factors like hacking, scamming, and other things. So with ETF, they may change their mind because someone is liable with their funds and it is legally registered under the laws of their government.

    Well, in what I have learned so far, as long as it is an ETF, it is good news and depending on the place where it is approved, it can be just bullish or mega bullish. This is because it not only spreads the name of bitcoin but it also enables the people who have little to no knowledge about bitcoin to still be able to get their hands on some profits. There are also people who know a lot about bitcoin but are too lazy to go through all the trouble of creating an account on an exchange or preparing a secure wallet etc., just to be able to invest on bitcoin. Of course, on the perspective of a crypto enthusiast ETFs aren't essential but for the normal people outside of this industry, it is an amazing opportunity.

[Lucius]

That's really not how it works. If a certain asset has increased liquidity through things like an ETF, increased stability is almost guaranteed. To what extent, is the question; maybe just to a minor degree, but it still helps.

When the guys from Wall Street get involved in all of this (more than is the case today), I'm sure some things will change, but not necessarily for the better. I found the post I was talking about, so even though it's just one man's opinion, I can say that I share his opinion. There is a saying that says "watch what you want because it could come true", and everyone just wants the highest possible price, no matter what may happen next.

theymos
4 yr. ago
Agreed, an ETF will almost certainly turn into a disaster at some point. The coins will be stolen, forks will be handled controversially, there will be issues with fungibility (eg. someone will "trace stolen coins" to the ETF's stash), the world will freak out when a bunch of retirees lose their life savings after doing the equivalent of buying BTC at $20k, etc. etc. It'll also get the sort of people who love regulation more into BTC, which is never good.

But investors want it, so it'll probably happen eventually. In particular, I totally condemn trying to get regulators to interfere in the free market more than they already do by blocking any ETF. (When the SEC was last looking into this, I had actually written a long document that I was going to send to them in order to comment on many technical issues with their proposed Bitcoin ETF regulation, but I decided not to send it because I don't want to have even the slightest hand in regulations.)

An ETF probably will increase the price a lot (until the ETF suffers its near-inevitable catastrophe), which has some pros and cons.

Note that an ETF can't affect Bitcoin itself, just the ETF investors and the market. There is no voting of any sort in Bitcoin, so it's not as if holding a lot of BTC gives you any power over Bitcoin, for example. I do agree with Andreas that the creation of a "corpo-Bitcoin" seems probable, perhaps after the ETF loses a ton of BTC and wants to undo it.