Toronto-based 3iQ Digital Asset Management could make history by listing Australia’s first cryptocurrency traded fund, after taking advantage of a technical delay that blocked rival investment firms from seeking the launch of two ETFs on the local stock market, including one on bitcoin (BTC) and ether (ETH).
A first cryptocurrency ETF in Australia
While ETFs and other financial tools are multiplying in the United States, notably with the new ETFs from Fidelity Investment on cryptocurrencies and the metaverse. Australia does not yet have this indispensable tool to connect traditional finance with crypto finance.
However, last week Canadian company 3iQ filed disclosure documents with the Australian Securities and Investments Commission (ASIC) to list the 3iQ CoinShares Bitcoin Feeder ETF and 3iQ CoinShares Ether Feeder ETF on the exchange. Australian Cboe.
Both products offer exposure to the respective cryptocurrencies through shares purchased on 3iQ’s existing ETFs listed on the Toronto Stock Exchange. Documents filed with ASIC reveal that 3iQ’s customer base would be limited to self-managed pension funds, which would limit its access but could speed up its application process.
Australian firms ETF Securities and Cosmos Asset Management had planned to launch three cryptocurrency ETFs on Cboe on April 27, but faced last-minute delays from downstream service providers. Go here to understand about the different ETFs.
A first-mover advantage
The first mover in this new niche could see flows in excess of $1 billion in early trading, some analysts say, as retail and institutional investors seek regulated exposure to digital asset markets. However, this is not likely to happen if the reports indicating that this ETF would be reserved for self-managed pension funds turn out to be true.
But others speculated that the 3iQ funds would likely be listed alongside the pending Cosmos ETF, given their similar structure. The Cosmos Purpose Bitcoin Access ETF will buy shares of the existing Purpose Bitcoin ETF, which is also listed in Toronto and describes itself as the “first physical settlement bitcoin ETF” in the world.
On the other hand, the two ETF Securities funds being developed intend to invest in a compartment that directly holds interests in bitcoin and Ethereum, stored offline in a Faraday cage to combat cybercrime. Holdings in ETF Securities funds can be redeemed in exchange for crypto assets.
Faraday cage technology to protect its cryptocurrencies
The Casa company had released in 2019 “Faraday cases” for cryptocurrency hardware wallets – protective cases designed to block electronic signals often associated with the remote erasure or alteration of data stored on hardware devices.
“We couldn’t see anyone else providing a good enough case. So we went to extremes and found a pro on the market and designed this togethersaid CEO Jeremy Welch.
Previously this technology was almost exclusively used by the military, however in recent years we have noticed that more and more investors are seeking to protect their cryptocurrencies as well as possible. It is therefore this technology that will be used by the two ETF Securities funds.
Australia is about to see several ETFs arrive, with different uses and target investor population. In this rather complicated period for cryptocurrencies, this could be a good sign for a resumption of massive investments.
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Observer of the social, economic and financial revolution driven by cryptocurrencies, defi and metaverses.