Spot Bitcoin ETF approved in Australia. Australia’s securities watchdog, the Australian Securities and Investments Commission (ASIC). Has approved the long-awaited launch of spot exchange-traded funds (ETFs) in the world’s. Two major cryptocurrencies, Bitcoin and Ethereum, following months of industry engagement.
Australian investors will be able to acquire direct exposure to the price of physical assets. Through funds that trade on the Australian Securities Exchange as a result of the permission (ASX). It also serves to reaffirm Australia’s commitment to digital innovation and opens the way. For authorities in other countries to expedite the approval of spot cryptocurrency exchange-traded funds (ETFs). As the asset class continues to gain popularity among investors.
ASIC published a set of best-practice recommendations and standards that fund issuers. Must adhere to when selling Bitcoin exchange-traded funds (ETFs) last week, with the regulator placing a particular emphasis. On the safety and storage of cryptocurrency assets in particular. Private keys, which are the equivalent of a master password, must, for example, be kept offline in cold storage. And adhere to “strong physical security procedures.” Additionally, fund issuers will be forced to create numerous private key backups. That will be stored in different geographical places to protect their funds. A Bitcoin custodial specialist who will be “needed to ensure that crypto-assets are stored. In safe and secure custody,” according to the watchdog. Will also appointed by the financial institutions.
Other requirements for spot Bitcoin ETF issuers include having a minimum of $10 million Australian dollars. ($7.38 million U.S. dollars) in net tangible assets and following to a variety of pricing. Disclosure, and risk-management standards, among other things.
Spot ETFs Versus Futures ETFs
The approval of a spot-backed ETF by the Australian Securities and Investments Commission (ASIC) . Comes just a few weeks after the Securities and Exchange Commission (SEC). Granted clearance to a futures-backed ProShares Trust. The ProShares Bitcoin Strategy ETF (BITO), in the United States. Generally speaking, the crypto industry prefers Bitcoin funds that retain the physical asset. To those that follow derivatives-based Bitcoin futures. Because they give a higher level of accuracy, stability, and transparency than the latter.
In their view, futures-backed ETFs do not accurately reflect the actual spot value of bitcoin. Because futures contracts necessitate the agreement of two parties to purchase or sell bitcoin. At a predetermined price and on a predetermined timetable. As a result, there may be premiums or discounts applied to the real bitcoin price.
Altcoin ETFs in Focus
ASIC has only approved Bitcoin and Ethereum exchange-traded funds (ETFs) at this time. Nevertheless, fund managers consider the action to be a significant step forward. In the approval of funds that hold lesser cryptocurrencies, known as altcoins, in the future. “Because investors will now be able to acquire Bitcoin through a cost-effective. And liquid investment vehicle, this will be a significant step forward for the cryptocurrency. We expect the opportunity to increase as other digital assets mature and become more widely available. “An interview with Arian Neiron, the Asia-Pacific chief executive of VanEck. Was publish in The Australian Financial Review.
However, while it is unclear how many spot Bitcoin ETFs are currently pending ASIC certification. It believed that BetaShares, VanEck, and Cosmos Asset Management. All have other cryptocurrency products in the works at this time.
Australia’s Crypto Investing Main Street
Following the successful launch of the Crypto Innovators ETF (CRYP.AX) on the Australian Stock Exchange earlier this week. Which saw the highest inflows of any ETF in the ASX’s history in the first hour of trading. Australian investment managers expected to continue expanding their crypto offerings. A recent announcement by the Commonwealth Bank of Australia (CMWAY). Indicated that the bank intends to provide its 6.4 million customers the opportunity. To purchase, sell, and keep cryptocurrency directly through the Commonwealth Bank of Australia app. Furthermore, Australia’s decision to give legal certainty for physically backed cryptocurrency exchange-traded funds (ETFs). Establishes a framework that other countries can adopt if they so choose.