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ETF Securities has claimed an Australian and Asian first, launching exchange-traded funds (ETFs) that allow direct ownership of Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH).
ETFS 21Shares Bitcoin ETF (EBTC) and ETFS 21Shares Ethereum ETF (EETH) will commence trading on ASX rival CBoe Australia on Thursday.
Most trading platforms that allow access to the ASX also allow shares to be bought on Cboe Australia.
The funds will be operated by ETFS with Swiss crypto-investment giant 21Shares providing research and background support.
ETF Securities had first brought the idea of cryptocurrency ETFs to Australian authorities way back in 2017.
“These funds are a culmination of many years of hard work by the ETF Securities and 21Shares teams,” ETFS head of distribution Kanish Chugh said.
“We have worked with regulators, service providers, and other stakeholders to ensure they are best in class.”
Direct ownership of crypto, no middleman
While there are a number of existing ETFs that track the fortunes of crypto, this pair is understood to be the first to allow investors to directly own Bitcoin and Ethereum.
“These funds do not use derivatives of any kind,” stated ETF Securities.
“They are not built as feeder funds into offshore ETFs. Nor do they engage in any lending or staking of the bitcoins and ether.”
As security measures, the bitcoin and ether will be held in cold storage within Faraday cages to ensure they are offline from the internet and away from “uncontrolled flows of electricity”.
ETF Securities claim the new funds offer a safer way of owning crypto, with all the built-in protections that traditional ETFs provide.
“Up until now, Australians keen to buy bitcoin or ether have been forced onto unregulated crypto exchanges, which come with weaker investor protections,” the company stated.
“By bringing cryptocurrency into an ETF, investors can trade and own it in a tightly regulated environment with government oversight.”
Crypto valuations have suffered greatly this year, in sync with growth stocks.
Against the Australian dollar, Bitcoin has dropped more than 52% of its value since November, and almost 20% just in the past week.
Ethereum has also halved since November and has shed in excess of 19% over the past five trading days.
Chugh said the correction had only whetted the appetite of local investors.
“Australian investor interest in cryptocurrencies has not waned in recent months even as we have seen underperformance,” he said.
“With Bitcoin’s recent sell-off as well, it may present an opportunity for investors who have been looking for attractive entry points into this new asset class.”
