A move by the United States financial regulator to approve the listing and trading of spot bitcoin exchange-traded funds (ETF) has been welcomed by Australian ETF providers, which claim it reflects the maturity of the cryptocurrency market and the confidence of regulators in the asset.
The US Securities and Exchange Commission (SEC) stated it had given its approval for the use of spot bitcoin ETFs, which provide investors with exposure to the price movements of the cryptocurrency by investing directly in it as the underlying asset. As a result of this decision, 11 spot bitcoin ETFs from investment managers such as Blackrock, VanEck and Invesco will be released in the US market this week.
Spot bitcoin ETFs have been available in a number of countries, including Australia, but Betashares head of digital assets Justin Arzadon said the US market was the largest and the SEC’s approval should build confidence in the digital asset ecosystem.
“The move to approve a spot bitcoin ETF will finally provide US-based investors with an option to invest in bitcoin via a familiar ETF structure,” Arzadon explained.
The anticipated flows into US-traded spot bitcoin ETFs in the initial days after launch are expected to be significant and would serve as an endorsement of the global investor preference for ETFs over other investing structures.
“Specifically for bitcoin, it removes the need to directly navigate issues related to storage and safekeeping, as well as providing buying options beyond unregulated exchanges,” Arzadon noted.
Global X ETFs Australia chief executive Evan Metcalf added: “The SEC’s approval affirms the maturation of the cryptocurrency space, strengthening its position as a legitimate and promising avenue for investors.
“It is encouraging to witness a growing recognition of digital assets as a legitimate investment class and we anticipate heightened demand for this type of exposure from investors, particularly here in Australia.”
BTC Markets chief executive Caroline Bowler pointed out the SEC approval was inevitable and part of the integration of crypto-assets into mainstream financial services via a traditional financial product.
She suggested bitcoin was an entry point for traditional asset allocators and the US decision provided impetus for the Australian Securities Exchange to list a spot bitcoin ETF.
“This further opens cryptocurrency to both retail and institutional investors via a traditional financial product. It is also reasonable to assume that this will expand crypto markets in general, as liquidity follows utility. So while this is an historic day for the industry, the impacts will be increasingly felt over time,” she said.
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