Australian crypto ETFs see a muted debut
Australia’s first cryptocurrency exchange-traded funds debuted amid a heavy global sell-off in the digital currency market. Following a delayed launch, the ETFS 21Shares Bitcoin ETF (EBTC), ETFS 21Shares Ethereum ETF (EETH), and Cosmos Purpose Bitcoin Access ETF (CBTC) kicked off trading on the Cboe Australia exchange on Thursday 12 May.
The ETFS portfolios are set to invest in digital tokens, while CBTC will go towards the Purpose Bitcoin ETF, the world’s first Bitcoin ETF. The Toronto-based security with $US1.1 billion in assets offers shareholders an entry point to ownership of the flagship cryptocurrency without a crypto wallet.
However, Bitcoin continues to slip, as its price has dropped to below US$30k for the first time since July 2021. The top crypto is dragging the wider market down with it, including popular stablecoins and the number two token, Ether, which is down 20 percent over the past 24 hours.
So it may come as no surprise that the three ETFs were met with a relatively muted response from investors, who are treading carefully as the crypto sector reels from its record losses. Upon their launch, the new funds saw trading volumes of under $1 million. As products of long-time industry leader ETF Securities, EBTC and EETH amassed inflows of $954k and $604k respectively. Meanwhile, the Cosmos Asset Management-issued Cosmos vehicle secured $454k on its inaugural day of trading.
On top of a drastic dip in the space, market players remain cautious as a move towards regulation takes hold around the globe and monetary tightening erodes liquidity. While some predict that Australia’s crypto market could hit US$1 billion by 2022, reassessments are likely to be made if the bearish sentiment keeps up.
