Bitcoin Miners Fund Floats Amid Crypto ETF Race

“[The launch of DIGA] This means investors don’t have to own cryptocurrencies directly and, most importantly, gives Australians the opportunity to access the potential benefits of the next wave of innovation in financial markets.

Cosmos itself is owned by Mawson Infrastructure Group, an Australian bitcoin miner listed on the Nasdaq, although the parent company of the fund’s issuer is not included in its holdings because its market cap is below the required market cap of 160. millions of dollars.

The fund’s main holdings include Riot Blockchain, Marathon Digital Holdings and Hut 8 Mining Corporation.

Its launch comes amid a wave of fund launches aimed at giving investors exposure to crypto assets through global stock markets. ETF Securities listed a “fintech and blockchain” ETF on Chi-X earlier this month, investing in a wider universe of 75 tech companies.

BetaShares, where Annan was previously a director for three years until May, has announced that it will list a fund with the Bitwise Crypto Industry Innovators index on the ASX. But a notice on the BetaShares website says the CRYP ETF is still “coming soon.”

Meanwhile, an ETF investing in bitcoin futures, managed by US firm ProShares, broke an 18-year record by amassing $ 1 billion in assets within two days of listing on the New Stock Exchange. York earlier this month.

But Mr Annan said the DIGA fund would be the “purest” of equity ETFs linked to crypto markets, given its concentration of companies with significant balance sheet exposure to digital assets, particularly bitcoin. This does not include unbiased trading platforms or crypto wallets, for example, or other intermediaries.

The underlying index shows past returns exceeding even that of bitcoin itself, earning 1257% for investors in the two years since its creation, compared to 645% for bitcoin in the same period. The ASX 200 returned 21.3 percent and S&P 500 (following the largest US listed companies) returned 42.9%.

The goal, Mr Annan said, was to get “as close as possible to the physical assets” of digital currencies while being in a structure in which investment dealers and financial advisers can integrate their workflows. existing systems and their regulatory compliance obligation. “DIGA does this,” he said.

“Waiting for clarity”

But he admitted that launching the niche equity ETF was a Plan B strategy and said Cosmos still had hopes of creating a listed fund investing in bitcoin itself, similar to commodity-backed funds. long-standing firsts such as ETF Securities ETF GOLD.

“There has been pent-up demand for a bitcoin ETF for quite some time,” Mr. Annan said. “It’s still going on with the regulator and the stock exchanges, but we’ve started to look at ‘what’s the alternative? “”

The design and structure of a bitcoin ETF has already been developed by Cosmos, including the thorny issue of custody of assets, but the start-up was waiting for such a product to be “licensed,” he said. declared.

BetaShares and rival ETF manager VanEck have both asked ASX to list cryptocurrency-backed funds on the exchange.

Chi-X Managing Director Vic Jokovic said Australia is taking a “very, very cautious” approach to bitcoin ETFs and is missing out on innovation in other markets.

“There are fund managers who are ready,” Jokovic said. “The problem is, it’s just not clear who owns the wheelhouse regulations. There are a lot of people waiting for clarification from the government or the regulator. “

While the recent Senate report on crypto regulation was “positive” in supporting innovation in digital assets, it did not give ETF makers or providers much certainty. exchanges, he said.

In June, the Australian Securities and Investments Commission threw cold water on the race to list a bitcoin ETF after saying that such a product could pose “a real risk of harm to consumers and consumers alike. markets “and must be operated and regulated with care.

More generally, the former Deutsche banker said Chi-X was “encouraged” by its new owner, Cboe Global Markets, not to be afraid to venture into the cryptocurrency markets.

Cboe, the third largest stock exchange in the United States, last week acquired ErisX, a digital asset clearing and derivatives platform.

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