The largest securities exchange in Australia, ASX, lists the first Bitcoin ETF, with a trading volume of 1.3 million dollars on the first day

Author: Weilin, PANews

On June 20, the Australian Securities Exchange (ASX) listed its first Bitcoin spot ETF, issued by the American asset management company VanEck, named VanEck Bitcoin ETF, with the code VBTC. VanEck's seed investment was approximately AUD 985,000 (about USD 657,000). From the first day's performance, the ETF achieved a trading volume of USD 1.3 million on its debut.

The ASX accounts for 90% of the Australian stock market share and is the largest securities exchange in the country. The listed VBTC is a feeder fund for the VanEck Bitcoin ETF HODL, valued at USD 647 million in the U.S. market. This fund has been registered with the Australian Securities and Investments Commission (ASIC) and is regulated as a "registered managed investment scheme." This also marks the culmination of over three years of negotiations between VanEck and Australian regulators. What benefits will this development bring to the market?

Early Approval Breaks Expectations, VBTC Joins the Competition

Bloomberg previously reported that the Australian Securities Exchange might approve the first batch of spot Bitcoin ETFs by the end of 2024, but the approval came earlier than expected.

Previously, ASX's competitor, Australia CBOE, launched a Bitcoin spot ETF (EBTC) in April 2022, issued in collaboration with Global X and 21Shares. EBTC does not directly hold Bitcoin. In June this year, CBOE also launched a Bitcoin spot ETF (IBTC) issued by Monochrome Asset Management, with Monochrome's CEO Jeff Yew stating that IBTC is Australia's first Bitcoin spot ETF that directly holds Bitcoin. As of June 18, EBTC's AUM was AUD 106 million. As of June 19, IBTC's single-day AUM was 54 BTC, approximately AUD 5.36 million.

Meanwhile, a spokesperson for ASX stated that currently, only VanEck has received approval to list a Bitcoin ETF on the exchange, while applications from other issuers are still in progress.

Sydney-based BetaShares Holdings Pty and another local company, DigitalX, are also waiting in line for listing.

DigitalX's CEO Lisa Wade stated that the company's spot Bitcoin ETF application is progressing smoothly and that they are working closely with ASX. She added that besides Bitcoin, DigitalX may also launch an Ethereum ETF on ASX. She said, "Ethereum is very popular. We are just waiting for support from ASX and ASIC."

Fee Competition Emerges, VBTC Achieves USD 1.3 Million in First-Day Trading Volume

VanEck's product disclosure statement shows that its annual management fee is 0.59%. In comparison, Global X's Bitcoin ETF has a management fee of 1.25%. However, Global X has now reduced its Bitcoin ETF fee from 1.25% to 0.59%, matching VanEck's offer. In contrast, the iShares Bitcoin Trust listed in the U.S. charges 0.25%.

Competition among exchanges is also ongoing. In April of this year, Monochrome Asset Management, based in Brisbane, withdrew its pending application to list a Bitcoin ETF on ASX and chose to go to its competitor, Cboe, where the ETF was officially listed this month.

On the other hand, VanEck's application has been in process for three years. Since early 2021, VanEck has been working to introduce a spot Bitcoin ETF to ASX. The investment giant submitted its application to ASX again in February this year.

Arian Neiron, VanEck's head of Asia-Pacific, stated, "We have a long and deep tradition in gold investment, so value storage investments are deeply rooted in our genes. We view Bitcoin as a form of digital gold."

VanEck's head of Asia-Pacific, Arian Neiron

In fact, as early as 2022, Australia CBOE approved an ETF launched by asset management company Cosmos Asset Management. In the same year, the Canadian-based 3iQ Digital Asset Management launched a Bitcoin spot ETF and an Ethereum spot ETF in Australia, namely the 3iQ CoinShares Bitcoin (BTC) Feeder ETF and the 3iQ CoinShares Ether Feeder ETF. Both ETFs are registered in Australia and are feeder funds, providing investors with opportunities to invest in the 3iQ CoinShares Bitcoin ETF and 3iQ CoinShares Ether ETF listed on the Toronto Stock Exchange. The underlying assets of these two Canadian ETFs are BTC and ETH stored in cold storage by the Gemini cryptocurrency exchange.

Additionally, 3iQ's Bitcoin spot ETF and Ethereum spot ETF are custodied at Chi-X (now Cboe), Australia's second-largest market, rather than ASX, due to some regulatory difficulties in listing blockchain and cryptocurrency-related stocks on the Australian exchange at that time.

However, in 2022, all three ETFs were delisted within a year due to insufficient demand and poor performance.

With the growing popularity of Bitcoin and virtual asset investment products, reports suggest that Australia's AUD 2.3 trillion pension market could facilitate inflows into these ETF products. Jamie Hannah, VanEck Australia's head of investment and capital markets, stated that about a quarter of the country's pension assets are held in self-managed superannuation funds, allowing individuals to choose their investment products, making this group likely buyers of cryptocurrency spot ETF funds.

Compared to other markets, the U.S. Securities and Exchange Commission approved the first batch of 11 spot Bitcoin ETFs on January 10, and as of June 18, the single-day trading volume reached USD 1.7 billion. Hong Kong also listed six virtual asset ETFs for Bitcoin and Ethereum on April 30, and as of June 19, the single-day trading volume of three Bitcoin spot ETFs in Hong Kong was USD 3.28 million.

From the first day's performance, ASX's first Bitcoin ETF achieved a trading volume of USD 1.3 million. The total trading volume of the ten ETFs in the U.S. on their first day reached USD 4.5 billion, averaging about USD 450 million per fund. Although this is far lower than the first-day performance of U.S. spot Bitcoin ETFs, interest in Bitcoin ETFs in Australia is surging, indicating a new trend that is influencing more markets.

Despite the differences in market size, VanEck is optimistic about the growth prospects of the ETF it issued in Australia, expecting it to follow a growth trend similar to that of U.S. spot Bitcoin ETFs. "Although the Australian market is much smaller than the U.S., and most of our inflows come from retail investors rather than institutional investors, we may follow a similar path," expressed Jamie Hannah, VanEck Australia's head of investment and capital markets, with a more positive outlook.