21 Shares, a Swiss company with offices in Zurich and NYC will launch Australia's first Spot Bitcoin ETF on April 27th. Teaming up with ETF Securities, an exchanged traded fund provider, the ETF will be 100% backed by Bitcoin, which will be held in "cold storage" by Coinbase. The product will be listed as (EBTC) on the Cboe trading platform. This announcement follows the announcement of another Bitcoin ETF product from Cosmos Asset Management that was approved and will launch on the same day. Cosmos' product will not hold BTC, but with hold shares of the Canadian based Purpose ETF which launched last year.
There is a supposed $1 billion in demand for these new Australian products, which is expected to be purchased immediately when the products are listed according to Eric Balchunas.
He continues to make the comparison that $1 billion in cash flow in an Australian ETF is comparable to $100 billion in cash flow in a US ETF. This is because the current ETF market size in Australia is $130 billion whereas the US ETF market size is $5.45 trillion. The numbers don't quite work out to a 100x difference but you get the point. The worldwide investor demand is there for these ETF products, they are just waiting for the products to be approved. This Australia approval comes in the face of continued US spot ETF rejections by the SEC.
Despite this, in an interview with CNBC, the Grayscale CEO said that "it really is, in our opinion, a matter of when and not if” regarding a spot Bitcoin ETF approval. In the weekly Bitcoin Fundamentals, Preston Pysh spoke with Eric Weiss, and they further expanded on the lurking US ETF approval stating, "The language [in prior rejections] suggests that he [Gary Gensley] wants to use this Bitcoin ETF as leverage to go after the exchanges" in essence putting the burden on the exchanges to make sure the products they list are in compliance with the SEC. Eric continues to suggest that the underperforming Grayscale trust could be used to give Gensler a reason to approve the spot ETF due to "investors protection".
Speaking of investors protection, as an individual, your best bet is always to buy and hold the actual asset that is Bitcoin in a non custodial manner, but there are still billions in sidelined capital from high net worth older Americans that don't want to deal with the process of setting up a wallet and taking custody of Bitcoin. A spot Bitcoin ETF product could get their feet wet, and force them to learn more about Bitcoin's value proposition, as it grows into a larger and larger chunk of their investment portfolio. Skin in the game is always the best teacher. There have been rumblings that an approval in the US may come sometime this year.
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