Category: ETFs

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Crypto News ETFs Investing Regulation Surveys

Nasdaq Reveals 72% of Financial Advisers Will Use Crypto After Spot ETF Approval

A survey of financial advisers commissioned by Nasdaq has found that 72 percent would be more likely to invest client assets in crypto if a spot ETF product were available in the US.

The survey was conducted throughout March 2022 and involved 500 US-based financial advisers who are currently, or are considering, allocating assets to crypto.

What Is a Crypto Spot ETF?

A crypto spot ETF is an exchange-traded fund (ETF) that allows an investor to gain exposure to crypto without actually having to own any digital assets. Unlike a futures ETF, a spot ETF is backed by the actual commodity, in this case digital assets, rather than by the value of the futures contracts tied to the commodity, which may diverge significantly from the actual asset price.

The advantages of investing in a crypto ETF over owning crypto directly are primarily:

  • exposure to crypto through a regulated product offering higher levels of consumer protection;
  • easier access for non-technical investors; and
  • no need to store crypto or deal with private keys, etc.

Crypto-based spot ETFs have so far not been approved by US authorities due to regulatory concerns, mostly around consumer protections and the risk of market manipulation.

Advisers Excited, But Most Expect To Wait

Although most of the financial advisers surveyed were excited about the prospect of a crypto-based spot ETF product, most aren’t holding their breath with only 38 percent considering it likely such a product will launch in 2022.

However, the lack of spot ETF products doesn’t mean financial advisers aren’t finding other ways to help their clients invest in crypto. According to Jake Rapaport, head of Digital Asset Index Research at Nasdaq, advisers are making do right now, but he expects investment products such as spot ETFs to become necessary soon to keep up with client demand:

The vast majority of advisers we surveyed either plan to begin allocating to crypto or increase their existing allocation to crypto. As demand continues to surge, advisers will be looking for an institutional solution to the crypto question that now dominates client conversations.

Jake Rapaport, head of Digital Asset Index Research, Nasdaq

Of the advisers surveyed, 50 percent reported they’re already using Bitcoin futures ETFs and 86 percent expected to increase their crypto allocations in the next 12 months.

This survey is just the latest to show that institutional investors are clamouring for crypto-based ETFs. Another survey released last September found 84 percent of institutional investors throughout Europe, US and Asia wanted to see more crypto ETFs, and a survey released earlier this month found almost nine out of 10 Australian financial advisers reported being asked about investing in crypto by clients.

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Bitcoin Crypto News ETFs Institutions

Canadian Bitcoin ETF Up 23% YTD And Now Holds Over 36,000 BTC

Since becoming the first spot bitcoin exchange traded fund in Canada in February 2021, the Purpose Bitcoin ETF has surpassed CAD$1.7 billion assets under management and, according to Glassnode, holds over 36,000 BTC.

Purpose Bitcoin ETF holdings. Source: Glassnode

One Bitcoin analyst noted the dramatic increase in holdings over the past week in particular:

The Canadian Purpose #Bitcoin ETF has just hit another ATH yesterday of 36.27k $BTC. Last week the ETF ended with an AUM of 34.07k bitcoin. That’s more than 2k bitcoin added this week so far …

Jan Wüstenfeld, Bitcoin analyst for @QE4Everyone

ETFs Not Welcomed by All

A spot-based Bitcoin ETF – that is, one exposed to the price of bitcoin, as opposed to something like a futures contract – is a somewhat divisive topic within the Bitcoin community.

Some regard ETFs as an easily-understood and accessible vehicle for everyday investors to gain exposure to bitcoin. In doing so, it broadens the tent so to speak, and opens up the sector to a whole new range of retail and institutional participants.

An opposing view highlights the risks of manipulation within paper markets linked to physical assets such as gold and silver. Within the context of Bitcoin, this could undermine the protocol’s most fundamental principle, namely a fixed and verifiable supply.

Unfortunately, one needn’t go back too far in history to find evidence of manipulation in financial markets. In 2020, investment bank giant JPMorgan paid US$920 million in fines and restitution for its role in manipulating the paper silver market.

Canada Leads the ETF Way

Whatever one’s view of spot-based Bitcoin ETFs, Canada has undoubtedly been at the forefront of bringing crypto ETFs to market. Not only was it the first country in the world to approve a Bitcoin ETF, it has since successfully launched another four.

By comparison, across the border in the US regulatory authorities are yet to approve a spot-based Bitcoin ETF, citing “manipulation concerns”. As reported by Crypto News Australia, as of November last year there were 34 ETF applications pending approval. Many have since been refused and, at the time of writing, more than a dozen applications remain outstanding.

Tellingly, the Securities and Exchange Commission (SEC) did approve a futures-based Bitcoin ETF in October. This was met with mixed reactions, with the consensus view emerging that it provided little benefit to retail investors relative to the intermediaries involved:

This vehicle means that the arbitrager takes their slice, the ETF provider takes their slice, the lawyer who set up the fund takes their slice, the administrator, the auditor … I mean, everybody is taking a slice out of your pie.

Real Vision founder/CEO Raoul Pal, on the futures-based Bitcoin ETF

While it remains unclear what the holdup is at the SEC, as one on-chain analyst noted, if the Purpose Bitcoin can double in 10 months, imagine what would happen if a spot-based ETF launched in the US:

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Canada CBDCs Crypto News ETFs

MIT Partners with Canada’s Central Bank to Study CBDCs

The US Massachusetts Institute of Technology (MIT) and the Bank of Canada have announced an agreement to collaborate on CBDC (Central Bank Digital Currency) research.

After exploring CBDCs for several years, the Bank of Canada has decided to step things up by partnering with MIT to embark on a 12-month research project focusing on the usefulness and technical aspects of CBDCs. As per the bank’s official press release:

The project forms part of the bank’s wider research and development agenda on digital currencies and fintech. It will focus on exploring and experimenting with potential technology approaches to determine how a CBDC could work.

Bank of Canada press release

The bank didn’t clarify if it intends to introduce a CBDC in the country. Updates on the findings will be provided at the end of the project period.

CBDC? Maybe; Crypto? Frozen and Seized

Canada embarked on CBDC studies in 2020 when it published a report titled Contingency Planning for a Central Bank Digital Currency. This was a year before the cryptocurrency market boomed and the world started exploring the possibilities. Now, a large swathe of countries are either researching or testing CBDCs, as per CBDC Tracker.

Canadian authorities, however, have proven to be anything but a Western liberal democracy, as they have described themselves. At first, the government demonstrated strong support for cryptocurrencies, allowing management firms and investment companies to launch crypto exchange-traded funds (ETFs) in the country.

However, a month ago, Canada decided to invoke the Emergency Act, cutting off crowdfunding for the Freedom Convoy, which had amassed millions of dollars in crypto donations.

If the Central Bank decides to issue a national CBDC, it can oversee all transactions being made with it. This is something the crypto community has protested about on numerous occasions, with famous whistleblower and former NSA agent Edward Snowden calling CBDCs a “perversion of crypto”.

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Bitcoin Mining Digital Asset Mining ETFs Investing

Investors Can Now Get Exposure to Crypto Mining With Newly Launched ETF

Global investment manager VanEck has launched a Digital Assets Mining (DAM) ETF, an exchange-traded fund customised to expose investors to firms within the DAM ecosystem. The fund will not directly invest in digital assets, rather it seeks to highlight the importance of miners.

VanEck’s DAM ETF is set to put a minimum of 80 percent of total assets into crypto mining securities, with the potential to earn at least 50 percent of their revenue from DAM activity. The ETF will be tracking the MVIS digital assets mining index closely, offering a net expense ratio of 0.5 percent.

Ed Lopez, head of product management for VanEck, has a lot of time for crypto miners:

https://www.linkedin.com/in/helopez/overlay/photo/

Blockchains introduce transparency, efficiency and lower costs compared to traditional centralised databases and processes, but without miners, blockchain transactions cannot be verified and audited, making their role absolutely essential.

Ed Lopez, head of product management, VanEck

The VanEck DAM ETF follows asset manager Valkyrie’s bitcoin miners’ ETF, WGMI, a fund focusing predominantly on crypto miners using renewable energy.

Crypto Mining in the Greater Industry

Since October 2020, Aussies have been able to get increased exposure to crypto through blockchain mining investments. With local crypto trading volume increasing during the pandemic, crypto mining has offered an alternative, lower-risk method of participating in the market without losing any savings.

The crypto mining process is linked to every transaction that takes place, and it is integral to ensure miners are properly compensated for their efforts. If you’d like to understand more about the mining procedure, check out our guide to bitcoin mining.

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Australia Crypto News Cryptocurrencies ETFs Regulation

ASX Chief Executive: More Crypto Companies to List on Australian Stock Exchange  

Dominic Stevens, chief executive of the Australian Stock Exchange (ASX), predicts that more companies with crypto ties could be listed on the Australian sharemarket in the coming year as cryptocurrencies start to play a bigger role in the tech industry.

With an eventful year of crypto companies making it into the mainstream, it seems 2022 may have some more of the same in store. The soon-to-retire ASX chief announced in his retirement speech last week that his mission over the past five years has been to expand the small role of tech companies in Australia’s mining and bank-heavy sharemarket.

Stevens has attempted to do this by allowing Australia to make strides in access to crypto but also by competing globally in the development of the blockchain industry. According to Max Cunningham, group executive of listings at the ASX, the exchange was establishing a framework for other companies backed by blockchain to debut by the middle of this year.

“We are moving on it and our goal is to bring investment-grade opportunities in various crypto asset classes to the ASX in the coming months and years,” Cunningham told The Sydney Morning Herald.

I think as the industry matures, you may see Square-like companies listing into the future, but we’re protective of the quality of the companies on our exchange, and it is a very fast-moving space.

Dominic Stevens, chief executive, ASX

Dorsey’s Block Lists on ASX

Stevens’ comments came just as Jack Dorsey’s Block (formerly Square) was listed on the ASX on January 20 after acquiring the Australian buy-now pay-later firm, Afterpay. The merged company will trade under the ticker SQ after being the first cryptocurrency-related company in the bourse’s history to be listed.

Aussie Crypto Progression

Initially, the ASX was cautious of how it approached crypto-affiliated companies but, as 2021 showed, Australia has been a hotbed for development in the nascent crypto industry. In October the ASX gave the go-ahead to investors to invest in crypto-based ventures through an exchange-traded fund (ETF). The following month, Australia also welcomed Chainalysis, one of the leading blockchain analytics firms, to establish a new office in Canberra after partnering up with the Commonwealth Bank to meet increased demand for its products.

Stevens further revealed that the ASX was looking into adding “pure” cryptocurrency ETFs to allow investment directly into the top cryptocurrencies:

At the end of the day if you look out to 2030, there will only be more technology companies, not less, and it will be a bigger section of the index because that’s just the way the world’s going. To not actually focus on that would have been a mistake.

Dominic Stevens, chief executive, ASX
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Bitcoin Blockchain Crypto News ETFs

World’s Largest Asset Manager ‘BlackRock’ Files for Blockchain Tech ETF

The world’s largest asset manager, BlackRock, has filed for a blockchain-focused ETF (exchange-traded fund).

BlackRock is a US-based hedge fund with roughly US$10 trillion in assets under management (AUM). The firm filed for an ETF focused on blockchain technology, called the Ishares Blockchain and Tech ETF.

As per the filing, the ETF will track the NYSE (New York Stock Exchange) FactSet Global Blockchain Technologies Index, which is composed of companies working on the development of blockchain technology in the US and overseas.

Ishares Blockchain and Tech ETF seeks to track the investment results of an index composed of US and non-US companies that are involved in the development, innovation and utilisation of blockchain and crypto technologies.

BlackRock filing

The filing doesn’t disclose the ticker nor the components of the index, but it reads that “the underlying index is composed of (i) blockchain technology companies, (ii) cryptocurrency mining, (iii) cryptocurrency trading and exchanges, (iv) crypto-mining systems, and (v) video multimedia semiconductors”.

Will the SEC Approve BlackRock’s ETF?

It will be interesting to see how the process plays out since the SEC (Securities and Exchange Commission) has been rejecting ETF proposals in the past seven days or so. Last week, for example, the SEC rejected Anthony Scaramucci’s SkyBridge spot ETF.

BlackRock has previously proven its intentions to explore cryptocurrencies and blockchain technology. A year ago, the asset manager disclosed its intent to allow its funds to engage in futures contracts based on Bitcoin.

Besides crypto ETFs, the NFT (non-fungible token) movement has seen the first NFT-focused ETF, thanks to fintech firm Defiance.

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Australia Bitcoin Crypto News ETFs Ethereum

Australia’s First Spot Crypto ETFs Launching Through ‘ETF Securities’ and ’21Shares’

ETF Securities will partner with 21Shares to provide Australian investors with access to the country’s first direct Bitcoin and Ethereum exchange-traded funds (ETFs), along with a best-in-class blockchain education and research centre.

Australia Gets its First Direct BTC and ETH ETFs

Subject to regulatory approvals, the ETFS 21Shares Bitcoin ETF (EBTC) and ETFS 21Shares Ethereum ETH will provide Australians with a way to invest in Bitcoin and Ethereum, via funds operated by the new partnership between ETF Securities and 21Shares. Zurich-based 21Shares, backed by Cathie Wood, has currently almost US$3 billion in assets under management in its 20 European crypto exchange-traded products (ETPs) available across eight exchanges. 21Shares has managed Bitcoin and Ethereum ETPs for three years and was additionally responsible for creating the world’s first physically-backed crypto ETP in 2018.

Graham Tuckwell, executive chairman of ETF Securities Australia, had this to say:

Once we had decided to build a range of crypto ETFs for the Australian market, there was only one partner we wanted to work with and that’s 21Shares. They are [at] the cutting edge of crypto ETPs in the world today.

Graham Tuckwell, executive chairman, ETF Securities Australia

Along with the ETFs, the partnership will also offer a research and education centre to be built on 21Shares’ investment-grade and cutting-edge research – some of the world’s most comprehensive. The research covers a vast array of different blockchains and cryptos, not only Ether and Bitcoin but also lesser-known, fast-growing cryptos such as Avalanche, Solana and Polygon.

The centre aims to explain in simple English how the often-complicated crypto and blockchain-verse works, and will also feature the latest crypto news, various blockchain metrics, price action and important news on miners, custodians and other companies involved in the supply chain.

Hany Rashwan, chief executive of 21Shares, expressed that the company was excited to take on the partnership to launch cryptos ETFs for Australian investors: “This partnership is an opportunity to combine our expertise to provide the simplest and most transparent way to access the best performing asset class of the last 10 years.”

Australian ETFs Undergo Explosive Growth

The announcement of the partnership between ETF Securities and 21Shares comes as welcome news amid Bitcoin ETF applications growing out of control. There are 34 Bitcoin ETF applications currently pending approval, with the number rising every day.

The ETF joins BetaShares ETF in offering crypto investment to the Australian market. BetaShares, an Australian crypto ETF, launched in early November and surpassed all expectations as A$5.2 million was traded in only five minutes, smashing Australian Securities Exchange trading records.