Australian Investors Can Now Access Bitcoin via ETFs
As the popularity of Bitcoin continues to grow, Australian investors are looking for more familiar ways to participate in the market. Exchange-traded funds (ETFs) offer a convenient and regulated option for gaining exposure to the cryptocurrency.
There are two main types of crypto ETFs available: futures-based and spot-based. Futures ETFs invest in futures contracts rather than holding the cryptocurrency directly, speculating on the future price of Bitcoin. This approach can sometimes lead to discrepancies between the ETF’s performance and the actual spot price of Bitcoin, especially in volatile market conditions. On the other hand, spot ETFs aim to track the current market price of Bitcoin, providing a more direct exposure to its price movements by holding the cryptocurrency directly.
Notable institutions like BlackRock, WisdomTree, and ArkInvest currently have pending applications for spot Bitcoin ETFs. If approved, these offerings could provide more direct and varied exposure to Bitcoin for investors.
In terms of historical background, the concept of Bitcoin ETFs has been a topic of discussion for several years. The Securities and Exchange Commission (SEC) in the United States has received numerous applications for Bitcoin ETFs, but regulatory concerns and market volatility have delayed their approval. Now, as major institutions seek approval for spot Bitcoin ETFs, the landscape of Bitcoin investments could potentially change.
Investing in a Bitcoin ETF is a simplified process that can be done through a brokerage or online share trading account, avoiding the need for digital wallets and the associated security concerns. In Australia, investors have access to a variety of Bitcoin ETFs, such as the Global X 21Shares Bitcoin ETF (EBTC) and Ethereum ETF (EETH) available on Cboe Australia (CXA) and the BetaShares Crypto Innovators ETF (CRYP) available on the Australian Securities Exchange (ASX).
Overall, Bitcoin ETFs offer a diverse range of ways for investors to engage with the market. Whether futures-based or spot-based, each type of ETF has its pros and cons, depending on the individual investor’s strategy, risk tolerance, and preference for direct or indirect exposure to Bitcoin’s performance.
This regulated investment structure provides a familiar pathway for investors who want exposure to Bitcoin and other cryptocurrencies. Plus, with pending approvals for spot Bitcoin ETFs from major institutions, the future of Bitcoin investments in the ETF market looks promising.
