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The first Australia Bitcoin ETF will not take the usual route like other ETFs. Rather than investing directly in Bitcoin, the Fund will invest in shares of Purpose Investment’s Bitcoin ETF.
The first Bitcoin exchange-traded fund (ETF) in Australia is reportedly listing in the coming week. On the 19th of April, Australian Financial Review said in a report that Cosmos Asset Management’s Bitcoin ETF will list on the Cboe equities trading platform. The report noted that listing the first Bitcoin ETF in Australia will test the mass demand for crypto and its adoption within the country.
First Bitcoin ETF in Australia
The Australian capital market, ASX Clear, has given the green light to the participants of the first Australian Bitcoin ETF. Notably, the first Australia Bitcoin ETF will not take the usual route like other ETFs. Rather than investing directly in Bitcoin, the Fund will invest in shares of Purpose Investment’s Bitcoin ETF. The Purpose Investment’s Bitcoin ETF is the first Bitcoin ETF in North America, which began trading in 2021. Before the announcement of the first Australia Bitcoin ETF, Cosmos had entered into an agreement with Purpose Investments in February.
Regarding the market participants, Financial Review detailed:
“ASX Clear, the powerful clearing house at the center of Australia’s equity capital markets, now has four market participants willing to stump up the tough margin requirements needed to cover the settlements risks for this highly volatile asset.”
Also, ASX clearing house confirmed that the participants would cover the 42% margin. The margin is the initial requirement for a Bitcoin ETF to begin trading. Currently, three of the market participants are institutional grade clearing, while one is retail clearing. Reportedly, the four participants have agreed to provide the required margin to trade a BTC product.
With four market participants, ASX chief risk officer Hamish Treleaven confirmed that the process may continue. The executive also added that market participants will receive notifications today as the product will start trading on the 27th. Now that ASX Clear has approved the Cosmos Bitcoin ETF, the National Stock Exchange of Australia may also get a green light.
The report highlighted other asset managers that are considering listing Bitcoin ETFs in Australia. They are VanEck Australia, Monochrome Asset Management, BetaShares, and ETF Securities.