ETF Securities to launch Australia’s first Bitcoin and Ethereum ETFs
Leading ETF provider ETF Securities will launch two funds that offer simple and cost-effective access to cryptocurrency investments. ETFS 21Shares Bitcoin ETF will be the first Australian ETF to invest in bitcoin, and ETFS 21Shares Ethereum ETF will be the first to invest in ether.
ETF Securities has partnered with 21Shares, a European fund manager that has been managing bitcoin, Ethereum and other cryptocurrency exchange traded products since 2018 and currently has US$2.5 billion of assets under management.
Both funds will list on Cboe Australia (formerly Chi-X). ETFS 21Shares Bitcoin ETF (Code: EBTC) will track the price of bitcoin in Australian dollars. It is fully backed by bitcoin held in cold storage by Coinbase.
ETFS 21Shares Ethereum ETF (Code: EETH) will track the Australian dollar price of ether, which is the cryptocurrency of the Ethereum blockchain. It is fully backed by ether held in cold storage by Coinbase.
Cold storage involves storing the private keys used to access and transact in cryptocurrencies in offline servers, with no internet access and out of reach of hackers. Coinbase’s vault has become the preferred storage for many institutions and it holds one of the largest stores of cryptocurrency.
Its vault uses advanced encryption and key management, multi-signature bitcoin addresses, military grade physical security and highly secure processes to keep cryptocurrencies offline and dispersed across three continents.
Graham Tuckwell, Executive Chairman of ETF Securities Australia says EBTC and EETH give investors a way of trading cryptocurrency in a tightly regulated environment, without the need to establish and maintain their own bitcoin or Ethereum wallets, or manage the risks.
“Once we decided to build a range of crypto ETFs for the Australian market, there was only one partner we wanted to work with, and that’s 21Shares. Its pioneering approach to secure investment in cryptocurrency has been emulated by other fund managers around the world,” Tuckwell says.
ETF Securities Head of Distribution Kanish Chugh says bitcoin has been the best performing asset over the past 10 years and ether has been one of the top performing assets over the past five years. “They may be used as an alpha tilts or side bets in a portfolio. They can also be bought as portfolio diversifiers, as they are completely different asset and uncorrelated to shares, bonds and commodities.”
Ethereum provides both a currency (ether) and blockchain-based contracts, sometimes called “smart contracts.” These contracts have placed Ethereum at the centre of crypto innovation and made it the driving force behind non-fungible tokens (NFTs), decentralised finance and decentralised autonomous organisations.
Chugh says that for investors looking for exposure to cryptocurrencies, investment via EBTC and EETH overcomes the pitfalls of the cryptocurrency market, including low exchange quality, weak custody arrangements, vulnerability to hacking and the loss of private keys and passwords.
CEO of 21Shares Hany Rashwan says, “We’re so incredibly excited to be able to offer the first direct exposure Bitcoin and Ethereum ETF in Australia. Australian investors clearly want and deserve an affordable, easy, and professional way to access the growing crypto asset class and we’re delighted to continue building accessible bridges into the crypto world. We’re starting with Bitcoin and Ethereum but have even more exciting plans for Australian investors.”
The net asset value of EBTC and EETH units is calculated by multiplying the coin entitlement of every unit by the price of underlying cryptocurrency as measured by CryptoCompare at 3pm Central European Time, converted into Australian dollars.