In brief
- The ETFS 21Shares Bitcoin ETF and ETFS 21Shares Ethereum ETF will track the cryptocurrencies' prices in Australian dollars.
- Trading of the ETFs will begin April 27 on CBOE Exchange.
While U.S. retail investors continue to wait for cryptocurrency exchange-traded funds to be approved by the Securities and Exchange Commission, Australians will soon join Canadians in gaining direct access to Bitcoin and Ethereum ETFs.
Australian asset management firm ETF Securities and Switzerland-based ETF issuer 21Shares announced today the launch of two ETFs on April 27. The ETFS 21Shares Bitcoin ETF and ETFS 21Shares Ethereum ETF will track the price of BTC and ETH, respectively, in Australian dollars and trade on the Chicago-based CBOE Exchange.
ETFs are investments that trade on a standard exchange just like regular stock. They can track the price of a single stock, commodity or asset or can track a whole basket of them. A Bitcoin ETF, then, would allow people exposure to BTC's price without having to buy the actual cryptocurrency.
ETFs are desirable for retail investors because they typically are cheaper than buying single stocks, can be easily incorporated into retirement plans, and have investor protection features in case of theft. Moreover, people don't have to bother with setting up an account with a cryptocurrency exchange or making a crypto custody strategy.
"Australian investors clearly want and deserve an affordable, easy, and professional way to access the growing crypto asset class," 21Shares CEO Hany Rashwan said in a press release.
U.S.-based, crypto-focused investment firms want them as well, as indicated by a pile of applications for Bitcoin ETFs on the SEC's desk. Grayscale, for instance, is looking to convert its Bitcoin Trust into an ETF, which should more closely hew to the underlying asset's price. And firms such as Anthony Scaramucci's SkyBridge Capital see ETFs as being much more profitable for firms as there are fewer restrictions on who can invest.
While the SEC has yet to approve a Bitcoin-backed ETF, it has approved several Bitcoin Futures ETFs, which track the price of BTC futures contracts. Futures contracts let buyers and sellers trade BTC at a predetermined price before a predetermined date. SEC Chair Gary Gensler's reasoning for allowing futures ETFs, but not spot market ETFs, is tied to what he sees as greater investor protections within the law that Bitcoin future ETFs fall under.
Regardless of the reasoning, Canada, and now Australia, have beaten the U.S. to the punch.