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Today is a historic day for Aussie cryptocurrency investors. Bitcoin (CRYPTO: BTC) will be available via the ASX for the first time as the Australian Securities Exchange welcomes the VanEck Bitcoin ETF (ASX: VBTC) to its bourse.
Other exchange-traded fund (ETF) providers have launched Bitcoin ETFs in Australia before. In May 2022, Global X Management — in partnership with 21Shares — opened the door to its Bitcoin ETF on Cboe Australia (formerly known as Chi-X).
However, today’s milestone marks the first of its kind for the largest stock exchange in Australia.
The original cryptocurrency is up 143% over the last year, fetching US$65,453 for one Bitcoin. Investors pushed the price higher in anticipation of its fourth ‘halving’ in April this year, reducing its further supply by 50%.
Breaking Bitcoin barriers with ASX debut
According to the 2024 Finder Consumer Cryptocurrency Report, approximately a quarter of Australians have owned or are interested in owning crypto. However, obtaining it can prove difficult for some.
VanEck Australia aims to make the journey to investing in Bitcoin easier by making the cryptocurrency available through a traditional financial product. Being an ASX-listed ETF is another important facet of the launch.
Through its own research, the asset manager discovered that 33% of surveyed advisers would include a Bitcoin ETF in their portfolios for clients if it were available on the ASX.
In describing the appeal of the spot Bitcoin ETF, VanEck Asia Pacific CEO Arian Neiron explained:
VBTC also makes Bitcoin more accessible by managing all the back-end complexity. Understanding the technical aspects of acquiring, storing and securing digital assets is no longer necessary.
Moreover, the new crypto investment option is being marketed as ‘the most cost-effective Bitcoin fund exposure in Australia’. VanEck’s product disclosure statement outlines an annual management fee of 0.59%. The Global X Bitcoin ETF carries a 1.25% management fee for comparison.
What is a ‘spot’ Bitcoin ETF?
The term ‘spot’ is derived from the spot price of an asset. In other words, spot Bitcoin ETFs give the investor exposure to the underlying value of Bitcoin at market prices. Meanwhile, other ‘non-spot’ Bitcoin ETFs can use derivatives, such as futures contracts, to mimic the underlying asset’s returns.
VanEck is not alone in its pursuit of bringing Bitcoin to the ASX.
Reportedly, DigitalX Ltd (ASX: DCC) is hot on the heels of VanEck. The alternative wholesale fund manager is also evaluating an ASX-listed spot Ether ETF down the track.
Editor’s note: After this article was published, a reduction in the Global X 21Shares Bitcoin ETF (EBTC) management fee was announced to match VanEck’s 0.59%. The reduction will take effect from 1 July 2024.