First Spot Crypto ETFs in Australia Underwhelm Traders Amid Market Downturn
A Bloomberg analyst called the debuts “shockingly timid” compared to similar 2021 launches in Canada
Blockworks exclusive art by axel rangel
key takeaways
- The Australia spot bitcoin and ether ETFs launched by ETF Securities and 21Shares marked trading volumes of $656,000 and $415,000, respectively, on their first day
- Industry watchers say big investors on the hunt for crypto ETF exposure already bought similar products in Europe or Canada
The first spot bitcoin and ether ETFs in Australia launched Thursday amid widespread crypto market sell-offs, leading industry watchers to note their lower trading volumes compared to similar debuts in Canada.
The 21Shares Bitcoin ETF (EBTC) and the ETFS 21Shares Ethereum ETF (EETH) booked trading volumes of $656,000 and $415,000, respectively.
EBTC and EETH, which track the price of bitcoin and ether in Australian dollars, are fully backed by respective digital assets held in cold storage by Coinbase. Each fund had roughly $9 million in assets at the end of Thursday.
Meanwhile, the Cosmos Purpose Bitcoin Access ETF (CBTC) invests in crypto through Purpose Investments’ Bitcoin ETF (BTCC), which launched on Canada’s Toronto Stock Exchange in February 2021. CBTC traded about $454,000 in total daily volume Thursday.
Though a 21Shares spokesperson told Blockworks that the EBTC and EETH took “the lion’s share of trading” in Australia on Thursday, Bloomberg Intelligence Senior ETF Analyst Eric Balchunas called the debut “shockingly timid” in a tweet — especially compared to BTCC.
On the first day of trading, the non-currency hedged BTCC.B and BTCC.U traded $209 million (CAD) and $52 million (USD), respectively, according to a Purpose Investments spokesperson.
Canada-based Purpose Investments’ Bitcoin ETF — the world’s first such product backed by physically settled bitcoin — crossed $1 billion (CAD) of assets a month after its February 2021 debut. The 3iQ CoinShares Bitcoin ETF, which launched in Canada in April the same year, reached $1 billion (CAD) after just three weeks on the market.
The Australian launches come as bitcoin’s price recently dipped below $28,000 for the first time since 2020. It traded around $29,000 at about 2 pm ET on Thursday according to Blockworks data — down 27% in a week. Ethereum’s price stood at about $1,960, down roughly 33%.
The crypto markets have also been rattled in recent days by the depegging of TerraUSD (UST) from the US dollar. UST traded around 37 cents Thursday afternoon.
“Crypto was and is a bull market plaything for most investors, [especially] the kind that would use an ETF for exposure,” Balchunas tweeted. “Bigger fish to fry for them [right now]. The die hard hodl-ers more likely own direct. That said, long-term these prob take root after next big rally.”
Dave Nadig, financial futurist at ETF Trends and ETF Database, told Blockworks he was not surprised by the trading volumes for the newcomer ETFs.
“Given that most investors of size can trade on whatever market they like…coming to market with products already available on larger exchanges is going to most likely draw only small local investor interest,” Nadig said. “If you were a hedge fund, you wouldn’t be waiting for [Australia] to launch. You’ve already bought in the EU or [Canada] if you needed exchange-listed exposure.”
Still, Nadig added, spot crypto launched in the US would be “a different animal.”
The SEC has not approved any of the spot bitcoin ETF proposals it has reviewed. But the US’ first-ever bitcoin futures ETF, the ProShares Bitcoin Strategy Fund (BITO), became the second-highest ETF ever in opening day volume when it launched in October, trading nearly $1 billion.
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