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Australia's First Bitcoin and Ether ETFs Flop, Here's Why

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Thu, 05/12/2022 - 14:49
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Alex Dovbnya
Australia's first spot-based crypto exchange-traded funds moved embarrassingly low volumes on Thursday
Australia's First Bitcoin and Ether ETFs Flop, Here's Why
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Australia's first cryptocurrency exchange-traded funds had an underwhelming debut earlier this Thursday.

The Cosmos Purpose Bitcoin Access ETF, ETFS 21Shares Bitcoin ETF (EBTC) and ETFS 21Shares Ethereum ETF (EETH) all launched on Cboe Global Markets earlier today.

The three investment vehicles attracted only a combined AUD$2 million (roughly $1.37 million) on their first day. ETFS 21Shares Bitcoin ETF (EBTC) was in the lead with AUD$954,925 ($655,000).

Kanish Chugh, head of distribution at ETF Securities, blamed the "relatively muted" trading volumes on the broader cryptocurrency market selloff.

Earlier today, Bitcoin careened to $25,401, the lowest level since December 2020, on the Bitstamp exchange. The cryptocurrency partially recovered to $27,851 at press time.

Chugh also pointed out that ASX Clear imposing "prohibitively expensive" margin requirements contributed to lukewarm demand. Major brokers have been pushed away from supporting the products due to 42% collateral.

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The much-awaited launch of Australia's first crypto ETFs was supposed to take place in late April. However, as reported by U.Today, their debut was postponed due to an issue with an unnamed third-party broker.

Australia is not the first country to launch a Bitcoin ETF. Canada kicked off the trend last February. The Purpose Bitcoin ETF moved a record-shattering CAD $260 million ($208 million) in trading volume on its first day.

The BetaShares Crypto Innovators ETF (CRYP), which was launched in Australia in November, moved $40 million to $27.7 million.

Eric Balchunas, senior ETF analyst at Bloomberg, says that Bitcoin was "a bull market plaything" for most investors. Now that crypto is a bear market, demand has fizzled.

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.