Asset Manager Monochrome to launch Spot Bitcoin ETF in Australia with a unique form of regulatory approval, according to a report from Financial Standard.
What is a Bitcoin ETF?
Broadly speaking, ETFs (Exchange Traded Funds) are financial instruments that, in this case, will allow market investors easier access to cryptos. These exchange-traded funds will bring many investments in Bitcoin and Ethereum.
In other words, a stock market ETF is a derivative asset that allows you to diversify your stock market account. It consists of the stocks that make up a stock market index. This means that a physically replicating fund will buy all the stocks in the index and in the same proportion as a stock in the index.
Alternatively, synthetically replicated ETFs achieve a performance equal to the target index through financial derivatives with swap contracts and options.
The main advantage of the Bitcoin ETF is that it is recognized by the Financial Markets Authority. It is essentially the SEC (Security and Exchange commission) that validates these financial derivatives.
Each country has its own financial market regulatory authority with a special little name. In France, it is the AMF (Autorité des Marchés Financiers) and in the United States the SEC (Securities and Exchange Commission). As for Australia, it is the ASIC (Australian Securities Investments Commission).
Australia’s first Bitcoin ETF launched in May
In May, financial regulators gave the green light to Australia’s first Bitcoin ETF to begin trading on April 27 and the Australian Financial Review reported that it could see up to $1 billion in inflows.
The Cosmos Asset Management Bitcoin ETF is listed on CBOE Australia with approval from the Australia Securities Exchange (ASX) Clear Capital Markets Clearinghouse. The approval came after Cosmos landed the minimum of four market participants to support the 42% margin requirements needed to cover the risk.
Another one a few months later by Asset Manager Monochrome
Digital asset manager Monochrome has received regulatory approval from Australia’s securities watchdog to offer cryptocurrency exchange-traded funds (ETFs) for cash.
The company noted that the products, dubbed Monochrome Bitcoin ETF, offer retail investors direct assured exposure and experience to the performance of Bitcoin, Ethereum and other cryptocurrencies. However, the asset manager did not reveal when the product would be available for trading.
As also reported by the Financial Standard, a survey of 1,000 Australians showed a slight difference between Australian investors owning crypto-currencies (15%) and those owning gold or bonds (6%). This difference, however, could serve to open the door to regulation of crypto-currencies in the country.
Jeff Yew, CEO of Monochrome, commented that the regulator’s approval of this license variation “represents a major step forward for the advisory industry and retail investors, allowing advisors to meet the market demands of their clients with respect to the emerging cryptoasset class.”