VanEck Bitcoin ETF Debuts on Major Australian Stock Market

Key takeaways:

• The VanEck Bitcoin ETF has debuted on the Australian Securities Exchange (ASX).
• This is the first Bitcoin ETF debut on ASX, with a seed investment of approximately A$990,000 ($660,429).
• The ETF is a feeder fund for the $647 million VanEck Bitcoin Trust in the US.

Explaining the Launch of VanEck Bitcoin ETF

Australia's primary stock exchange, the Australian Securities Exchange (ASX), welcomed its first Bitcoin ETF on June 20. The VanEck Bitcoin ETF (ticker: VBTC) started trading with an initial asset value of approximately A$990,000 ($660,429). This marks a major listing milestone on the ASX.

The first bitcoin ETF is now available on @ASX.
Learn more about the VanEck Bitcoin ETF $VBTC.https://t.co/grfIje1BgF pic.twitter.com/JOyHzb20GN

— VanEck Australia (@vaneck_au) June 19, 2024

Unlike other Bitcoin ETFs, the VanEck fund will not directly own Bitcoin. Instead, it acts as a feeder fund for the $647 million VanEck Bitcoin Trust in the US, which means that the Australian ETF will invest in shares of the US trust, which holds Bitcoin.

This indirect approach enables Australian investors to gain exposure to Bitcoin through a locally listed ETF. The annual management fee is 0.59%.

While this is the first Bitcoin ETF on the ASX, it is not the first Bitcoin ETF in Australia. Other Bitcoin ETFs, such as Monochrome Bitcoin ETF (IBTC), have been trading on the Cboe Australia exchange, the country's second-largest stock exchange, for some time. 

Monochrome was proud to host 120 guests in Sydney last week as we celebrate the upcoming launch of the Monochrome Bitcoin ETF.

This milestone marks a significant step in our journey empower investors with the tools and confidence to navigate the digital financial landscape. pic.twitter.com/tfWGzYwl3R

— Monochrome (@MonochromeAsset) June 2, 2024

The successful launch of the VanEck Bitcoin ETF on the ASX culminated over three years of rigorous discussions between fund managers and the exchange operator, which ensured the implementation of robust safeguards.

ETF enthusiasts see this as part of a global trend of cryptocurrency investment products gaining acceptance.

Related: Bitcoin ETFs Snap Up Two Months’ Worth of Mining Supply in One Week

Notably, since January 11, 2024, the US market has seen billions of dollars invested in Bitcoin ETFs, paving the way for global growth and interest in these crypto products.

In the same vein, the Hong Kong Securities and Futures Commission (SFC) approved the first batch of spot Bitcoin and Ethereum ETFs on April 15. These ETFs began live trading on April 30. However, investors' interest has been relatively subdued compared to the US market.

UPDATE: HONG KONG #BITCOIN SPOT ETFS SAW NET OUTFLOWS OF 520 BITCOINS WORTH $32M ON MAY 13

— BSCN Headlines (@BSCNheadlines) May 14, 2024

Nevertheless, the success and performance of the VanEck Bitcoin ETF could potentially lead to the introduction of more cryptocurrency-related products on the ASX in the future.

How Does this Impact the Australian Crypto Sector?

The VanEck Bitcoin ETF's launch on the ASX boosts cryptocurrency legitimacy in Australia. The Bitcoin ETF expands its appeal to traditional investors. Furthermore, it paves the way for a broader investor base, market growth, and increased investment in the crypto sector. 

At first, Australian regulators were cautious about cryptocurrency. 

They prioritized mitigating risks for local investors. But now, the Australian Securities and Investments Commission (ASIC) is taking a more proactive approach, establishing strict rules to safeguard consumer interests and enforcing action against non-compliant crypto platforms.

On October 16, 2023, Australia's Treasury published a regulatory consultation paper addressing setbacks in the crypto industry and suggested the emergency need for increased oversight to protect traders and investors. 

However, the latest launch of another Bitcoin ETF signals a more favorable reception to the asset class, potentially setting a positive precedent for the country’s crypto sector’s ambitions.