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Cryptocurrency, ETFs

Crypto ETFs soon open to investors

cryptocurrency ETFs

Investors will be able to directly access Bitcoin and Ethereum cryptocurrencies via two new ETFs set to be offered on the Cboe Australia exchange.

ETF Securities has announced a partnership with specialist European fund manager 21Shares to launch two exchange-traded funds (ETFs) offering investors direct access to two popular cryptocurrency assets.

The ETFS 21Shares Bitcoin ETF is fully backed by bitcoin held in cold storage by Coinbase and will track the price of bitcoin in Australian dollars.

The ETFS 21Shares Ethereum ETF is backed by ether, the cryptocurrency of the Ethereum blockchain, held in cold storage by Coinbase and will also use Australian dollars to track the price of ether.

Cold storage involves storing the private keys used to access and transact in cryptocurrencies in offline servers, with no internet access and out of reach of hackers.

Both offerings will be listed on the Cboe Australia exchange, formerly known as Chi-X.

ETF Securities head of distribution Kanish Chugh noted both bitcoin and ether have been among the top performers in recent years.

“They may be used as alpha tilts or side bets in a portfolio. They can also be bought as portfolio diversifiers as they are a completely different asset and uncorrelated to shares, bonds and commodities,” Chugh said.

“Ethereum provides both a currency (ether) and blockchain-based contracts, sometimes called ‘smart contracts’.”

According to 21Shares chief executive Hany Rashwan, his organisation has been keen to give Australian investors access to bitcoin and ether after managing crypto-assets in Europe since 2018.

“We’re so incredibly excited to be able to offer the first direct exposure Bitcoin and Ethereum ETFs in Australia. Australian investors clearly want and deserve an affordable, easy and professional way to access the growing crypto asset class and we’re delighted to continue building accessible bridges into the crypto world,” Rashwan said.

“We’re starting with Bitcoin and Ethereum, but have even more exciting plans for Australian investors.”

ETF Securities executive chairman Graham Tuckwell said the ETFs will additionally allow investors a method of trading without needing to establish a crypto-wallet or individually manage risks.

“Once we decided to build a range of crypto ETFs for the Australian market, there was only one partner we wanted to work with, and that’s 21Shares. Its pioneering approach to secure investment in cryptocurrency has been emulated by other fund managers around the world,” Tuckwell said.

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