Wednesday, October 5

Australia Secures Prior Approval for Bitcoin ETFs

After the United States starts approving its first Bitcoin ETFs, other countries follow suit, with the Australian Securities and Investments Commission (ASIC) giving advance permission to several management companies that are looking to create a Bitcoin ETF in the country.

According to Business Insider Fund management companies looking to launch ETFs based on digital assets may soon be able to do so following this early green light given by Australia’s largest financial regulatory authority. Among the products that may be approved in the future, there are, of course, Bitcoin ETFs and Ethereum.

According to information, many managers in the country are starting the application process after the ASIC gave this positive signal. The decision was not immediate, of course, with authorities consulting cryptomarket experts for months.

With early approval, regulators also detailed standards and announced a draft of the initial regulatory requirements.

In an announcement this Friday (29), ASIC said it recognizes the interest and demand for ETPs and other investment products involving the cryptomarket in Australia.

Rules for Bitcoin ETF in Australia

Among the different rules established for a future approval, the ASIC requires that fund managers have a Bitcoin custody expert who “will need to ensure the security of the cryptoactives that are stored and secure“.

It is noteworthy that the advance approval and future approval is in relation to ETFs in the Bitcoin spot market and does not include products with derivatives or future contracts with cryptocurrencies.

Fund managers will also need an initial $10 million working capital in hard assets before launching the Bitcoin ETF, as well as having to deal with other risk and pricing obligations.

ETF is an interesting investment product for the retail and institutional market. ETFs allow people to invest in multiple assets at the same time, without having to understand them all or go through the initial hurdles to start one of those investments.

This helps the broad audience get more exposure to Bitcoin, albeit indirectly. In Brazil, for example, B3 already lists several ETFs, Bitcoin and Ethereum, but none is the custodian of the assets.

Rising ETFs can increase market confidence and strengthen the cryptomarket as a whole. Furthermore, these are much more interesting tools for institutional investors who may not trust the volatility of direct investment or do not want the “headache” of dealing with the custody of their assets.

But as an investment, they also have risks and variations depending on the market’s interest in assets, which are normally listed on stock exchanges.