The two ETFs – ETFS 21Shares Bitcoin ETF (EBTC), ETFS 21Shares Ethereum ETF (EETH) – will begin trading on Thursday, 12th May 2022, on Cboe Australia.
ETF Securities has won the race to launch Australia’s first bitcoin and ether ETFs, ending a multi-year contest among ETF providers.
The launch – the first of its kind in Asia and Australia– is a major step in the mainstreaming of cryptocurrency ownership. Up until now, Australians keen to buy bitcoin or ether (the native currency of the Ethereum blockchain) have been forced onto unregulated crypto exchanges—which come with weaker investor protections.
By bringing cryptocurrency into an ETF, investors can trade and own it in a tightly regulated environment with government oversight.
The ETFs have been built in partnership with 21Shares, the Swiss cryptocurrency funds management giant. Under the partnership, ETF Securities runs the funds while 21Shares provides research and operational support.
EETH and EBTC hold bitcoin and ether directly, and work in a very similar way to the $2.6 billion ETFS Physical Gold (GOLD). Investors who buy EBTC and EETH have direct ownership of bitcoin and ether. EBTC and EETH can be redeemed for bitcoin and ether at any time.
These funds do not use derivatives of any kind. They are not built as feeder funds into offshore ETFs. Nor do they engage in any lending or staking of the bitcoins and ether.
All bitcoin and ether is held in offline (“cold storage”) and in Faraday cages, meaning away from the internet and away from any uncontrolled flows of electricity. This substantially reduces the risk of hacking.
Their launch ends a process which began in 2017, when ETF Securities first approached Australian regulators.
Kanish Chugh, ETF Securities Head of Distribution, said: “These funds are a culmination of many years of hard work by the ETF Securities and 21Shares teams. We have worked with regulators, service providers and other stakeholders to ensure they are best in class. The launch of these funds shows our commitment to being Australian ETF innovators.
“Australian investor interest in cryptocurrencies has not waned in recent months even as we have seen underperformance and with bitcoin’s recent sell off as well, it may present an opportunity for investors who have been looking for attractive entry points into this new asset class.”