ASX, Australia's largest stock exchange, lists the first Bitcoin ETF, with first-day trading volume reaching $1.3 million

On June 20, the Australian Securities Exchange (ASX) listed the exchange’s first Bitcoin spot ETF, issued by the American asset management company VanEck, named VanEck Bitcoin ETF, code VBTC. VanEck’s seed investment is approximately A$985,000 (approximately US$657,000). Looking at first-day performance, the ETF saw $1.3 million in trading volume on its first trading day.

ASX accounts for 90% of the Australian stock market and is the largest stock exchange in the country. Listed VBTC is the feeder fund of the $647 million VanEck Bitcoin ETF HODL in the U.S. market. The fund is registered with the Australian Securities and Investments Commission (ASIC) and is regulated as a "registered managed investment scheme". It also marks the culmination of more than three years of negotiations between VanEck and Australian regulators. What benefits will relevant developments bring to the market?

Early approval breaks expectations VBTC joins the race

Bloomberg previously reported that the Australian Securities Exchange may approve the first batch of spot Bitcoin ETFs before the end of 2024. Based on the current results, the approval is earlier than expected.

Previously, ASX’s competitor Australia’s CBOE had launched the Bitcoin Spot ETF (EBTC) issued by Global X in partnership with 21Shares in April 2022. EBTC does not hold Bitcoin directly. In June this year, CBOE also launched the Bitcoin spot ETF (IBTC) issued by Monochrome Asset Management. Monochrome CEO Jeff Yew said that IBTC is Australia’s first Bitcoin spot ETF that directly holds Bitcoin. As of June 18, EBTC’s AUM was A$106 million. As of June 19, IBTC’s single-day AUM was 54 BTC, which is approximately AUD 5.36 million.

Meanwhile, an ASX spokesperson said that currently only VanEck has received approval to list a Bitcoin ETF on the exchange, with applications from other issuers in progress.

Sydney-based BetaShares Holdings Pty and another local company DigitalX are also lining up to list.

DigitalX CEO Lisa Wade said the company’s spot Bitcoin ETF application is progressing well and is working closely with the ASX. She added that in addition to Bitcoin, DigitalX could potentially launch an Ethereum ETF on the ASX. She said: "Ethereum is very popular. We are just waiting for support from ASX and ASIC."

Fee competition emerges, VBTC's first-day trading volume reaches $1.3 million

VanEck's product disclosure statement shows that its annual management fee The rate is 0.59%. For comparison, the Global X Bitcoin ETF has a management fee of 1.25%. But for now, Global By comparison, the U.S.-listed iShares Bitcoin Trust charges 0.25%.

Competition among exchanges is also continuing. In April, Brisbane-based Monochrome Asset Management canceled its pending application to list a Bitcoin ETF on the ASX, opting instead to head to Cboe's rival Australian exchange, where the ETF officially launched this month.

VanEck’s application, on the other hand, has been in the works for three years. VanEck has been working to bring a spot Bitcoin ETF to the ASX since early 2021. The investment giant submitted another application to the ASX in February this year.

Arian Neiron, Head of Asia Pacific at VanEck, said: “We have a long and deep tradition in gold investment, so store-of-value investing is deeply rooted in our DNA. We view Bitcoin as a form of digital gold. "

VanEck Asia Pacific Head Arian Neiron

In fact, as early as 2022, Australia's CBOE approved the ETF launched by the asset management company Cosmos Asset Management. In the same year, Canada-based 3iQ Digital Asset Management launched Bitcoin spot ETFs and Ethereum spot ETFs in Australia, namely 3iQCoinShares Bitcoin (BTC) Feeder ETF and 3iQ CoinShares Ether Feeder ETF. Both ETFs are registered in Australia, as well. "Feeder Funds" provide investors with investment opportunities in the 3iQ CoinShares Bitcoin ETF and 3iQ CoinShares Ether ETF, which are listed on the Toronto Stock Exchange respectively. The underlying assets of these two Canadian ETFs are BTC and ETH that are cold-stored by the Gemini cryptocurrency exchange.

In addition, 3iQ’s Bitcoin Spot ETF and Ethereum Spot ETF were hosted on Australia’s second largest market, Chi-X (now Cboe), rather than ASX, as blockchain and cryptocurrency-related stocks were listed on the ASX at the time Some regulatory difficulties remain.

However, in 2022, these three ETFs were delisted in less than a year due to lack of demand and poor performance.

With the growing popularity of Bitcoin and virtual asset investment products, there are reports that Australia’s $2.3 trillion superannuation market may facilitate inflows into these ETF products. Jamie Hannah, deputy head of investments and capital markets at VanEck Australia, said about a quarter of the country’s superannuation assets are held in self-managed superannuation schemes, which allow individuals to choose their own investment products. This group of people is likely to become a crypto- Buyers of currency spot ETF funds.

Compared with other markets, the U.S. Securities and Exchange Commission approved the listing of the first 11 spot Bitcoin ETFs on January 10. As of June 18, the single-day trading volume was US$1.7 billion. Hong Kong also launched six virtual asset ETFs for Bitcoin and Ethereum on April 30. As of June 19, Hong Kong’s three Bitcoin spot ETFs had a single-day turnover of US$3.28 million.

Judging from its first-day performance, ASX’s first Bitcoin ETF’s first-day trading volume reached $1.3 million. Total first-day U.S. trading volume for the 10 ETFs reached $4.5 billion, averaging about $450 million per fund. Although well below the first-day performance of U.S. spot Bitcoin ETFs, interest in Australian Bitcoin ETFs is surging, with a new trend affecting more markets.

Despite the difference in market size, VanEck is optimistic about the growth prospects of the ETF in Australia, predicting that it will have a similar growth trend to the US spot Bitcoin ETF. "Although the Australian market is much smaller than the US and most of our inflows are from retail investors rather than institutional investors, it is possible that we will follow a similar path," said Jamie, deputy head of investments and capital markets at VanEck Australia. Hannah expressed more positive expectations.

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