Australia’s First Crypto ETFs Get a Lukewarm Reception as Markets Plunge

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In Brief
  • Australia's first three crypto ETFs debuted on Cboe Global Markets.

  • First half day's trading was somewhat muted due to market conditions.

  • Crypto winter sets in as markets dump to 60% from ATH.

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The inaugural cryptocurrency-focused exchange-traded funds (ETFs) have begun trading in Australia amid a wider market sell-off that could be the beginning of another prolonged crypto winter.

Australia’s first crypto ETFs debuted on the Cboe Global Markets local exchange on May 12 following a delayed launch. The three funds are 21Shares Bitcoin ETF, Ethereum ETF, and Cosmos Purpose Bitcoin Access ETF.

The 21Shares products are spot funds that will invest directly in BTC and ETH while the Cosmos fund will invest in the Canadian Purpose Bitcoin ETF which has around $1.1 billion in assets according to Bloomberg.

Australia has been open and welcoming towards the crypto sector while in the United States, the doors remain firmly closed to such investment products.

Crypto ETFs arrive with quiet fanfare

The funds were met with lukewarm reception as crypto markets continued to tank hard on May 12 following a week of heavy losses.

The Cosmos Purpose fund and 21Shares’ Bitcoin ETF had lackluster trading volumes of about $AU 250,000 ($US 173,000) in the first hour of trade. The Ethereum fund had volumes of around $AU 150,000 ($US 103,000) according to the AFR.

After the first half of the day, the market capitalization of the three ETFs was roughly equal, ranging from $AU 400,000 ($US 276,000) to $AU 470,000 ($US 324,000).

Market analysts used the terms “somewhat muted” and a “fizzer” to describe the first half day’s trading. However, Cosmos Asset Management chief executive Dan Annan was unperturbed, stating:

“We have seen good reception from the market for day one trading to this point. We’re happy with how the product is trading regarding spreads.”

He added that there was no doubt that some investors are currently cautious with the current market volatility, but remained upbeat about longer-term prospects:

“However, those investors with long term views on exposure to Bitcoin and cryptocurrency will understand that this is a good opportunity for an entry point, and therefore, we hope to see an increase in volumes in the days ahead.”

Crypto winter begins

The Aussie ETF debut comes on a day when crypto markets have tanked by more than 15% shedding a whopping $225 billion from total market capitalization.

The total market cap is currently at $1.26 trillion, its lowest level since July 2021 according to CoinGecko. Markets have now tanked almost 60% since their November all-time high of just over $3 trillion confirming that the crypto winter has arrived and a prolonged bear market is likely to ensue.

Bitcoin has plunged more than 10% to $27,836 at the time of writing while Ethereum has been smashed 17% in a fall to $1,900 for the first time in ten months.

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Martin has been covering the latest developments on cyber security and infotech for two decades. He has previous trading experience and has been actively covering the blockchain and crypto industry since 2017.

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