Crypto

Australia's first Bitcoin and Ethereum ETFs to launch on Thursday

Wed 11 May 22, 1:29pm (AEST)
Crypto 4 - Stacked cryptocurrency coins (Bitcoin, Ethereum, Litecoins)

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Key Points

  • Cosmos and 21Shares will debut a world's first Bitcoin and Ethereum ETF
  • Bitcoin prices are down around -20% in the past two weeks
  • Heightened institutional involvement in crypto has made the asset increasingly correlated to traditional assets

Three cryptocurrencies ETFs are due to list on the Cboe Exchange - the main competitor to the Australian Securities Exchange - this week, after a previous hold up due to “standard checks”.

On Thursday, Australian investors will be able to access the: 

  • Cosmos Purpose Bitcoin Access ETF (Cboe: CBTC)

    • Enables investors to purchase the Purpose Investment Bitcoin ETF listed on the Toronto Stock Exchange

  • 21Shares Bitcoin ETF (Cboe: EBTC)

  • 21Shares Ethereum ETF (Cboe: EETH)

    • 21Shares fund is backed with Bitcoin and Ethereum held in cold storage by Coinbase

“As crypto ETFs are completely new to Australia and the infrastructure is being built from the ground up, a service provider downstream needs more time to support the launch,” 21Shares had said last month, according to Bloomberg.

Wider acceptance and accessibility

“These ETFs will provide a pathway for entities and individuals to get exposure to bitcoin via traditional regulated instruments,” Jonathan Miller, managing director of Australian cryptocurrency exchange Kraken, told the Australian Financial Review

“As a result, we may see more Australians shareholders and conservative, restricted institutions add bitcoin exposure to their portfolio.”

Dodging a bullet

Had investors immediately jumped on board the ETFs on the proposed listing date of Wednesday, 27 April - they'd be down by around -20%.

2022-05-11 13 05 13-Window
Bitcoin/USD price chart (Source: TradingView)

Rising correlation

On Monday, I talked about Bitcoin's increasing correlation with tradition assets such as venture capital and the Nasdaq.

The 40-day correlation between Bitcoin and the Nasdaq hit a record high of 84% this week.

Morgan Stanley has observed that retail investors are no longer the dominant crypto trader, now replaced by institutional players.

Retail was responsible for roughly a third of trading volumes on the Coinbase exchange in 2021, down from around 80% in 2018.

2022-05-11 13 15 16-Window

"The increased involvement of institutions, which are sensitive to availability of capital and therefore interest rates, has contributed in part to the high correlation between Bitcoin and equities."

"The correlation between Bitcoin and equity indices has remained high and will continue to do so unless Bitcoin becomes widely used as a medium of payment - which looks unlikely to happen soon."

Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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