Bitcoin ETFs Arrive in Australia Just as Crypto Market Tanks

Australia’s inaugural cryptocurrency exchange-traded funds began trading on Thursday amid a meltdown in digital tokens. The ETFS 21Shares Bitcoin ETF, ETFS 21Shares Ethereum ETF and Cosmos Purpose Bitcoin Access ETF debuted on Cboe Global Markets Inc.’s local exchange after a delayed rollout.

The ETFS portfolios will invest directly in virtual coins, while the Cosmos vehicle will invest in the Purpose Bitcoin ETF, a Toronto-listed fund with assets of about C$1.4billion ($1.1 billion).

The funds are launching as the crypto sector reels from the unraveling of a high-profile stablecoin known as TerraUSD. A global wave of monetary tightening is also sapping liquidity and denting speculative investments.

Stablecoins are key elements of the plumbing in the crypto market, where traders park funds as they move in and out of other tokens. TerraUSD is supposed to have a stable value of $1 but the peg has frayed, casting a pall over the market for digital tokens.

Bitcoin has plunged 39% this year, while Ether has shed 46%. Wild swings are common in crypto markets and the latest swoon may whet some people’s appetite to bet on a recovery.

Trading volume of Australia’s inaugural cryptocurrency ETFS surpassed A$1 million only two hours after the opening bell. This marks a robust start for the country, as its entire ETF market is only A$152 billion versus the US’ $6.3 trillion, according to Bloomberg Intelligence analysts Rebecca Sin and James Seyffart.

“ETF Securities and Cosmos Asset Management’s cryptocurrency launch may go down in history books and put Australia’s ETF market in the running,” they wrote in a report. On some projections, Australia’s crypto market may hit $1 billion by year-end and the country could also act as the Asia-Pacific’s gateway to crypto ETFs, the analysts added. 

Bitcoin rose about 0.5% to $28,550 as of 11:32 a.m. in Hong Kong, while Ether was down 1% at $2,015.