Insights

Will we see a cryptocurrency ETF on the ASX this year?

A way of investing in Bitcoin or Ethereum via shares purchases would open the door to millions of Australians with a broking account.
The post Will we see a cryptocurrency ETF on the ASX this year? appeared first on The Motley Fool Australia. –

cryptocurrency

Cryptocurrencies have once again piqued the interest of some retail investors, as the likes of Bitcoin and Ethereum have reached new all-time highs.

And this time it could be fair dinkum. There are reports institutional investors have finally started buying up electronic currencies.

Bitcoin has quadrupled in price in the past 12 months, making it one of the best-performing assets over the COVID-19 period.

But to many share investors, they remain a bit of a mystery. 

How does one acquire them? How do you store them safely? How liquid are they?

Buying shares in cryptocurrency

One idea floated for many years is the concept of a cryptocurrency-based exchange traded fund (EFT).

This would allow the convenience of just purchasing shares to gain exposure to the wild fortunes of the cryptocurrency world.

Kraken managing director Jonathon Miller said such a product would also have implications for authorities.

“Comments from institutional crypto fund managers such as Digital Asset Capital Management’s Richard Galvin stress the benefits crypto-ETFs would bring for regulators – mainly due to transactions then flowing through traditional brokers, which regulators are familiar with,” he said.

“ETFs have proven an incredibly popular investment vehicle, and their ability to minimise volatility by spreading risk across a given industry or asset class on paper would make it appealing in the hyper-volatile world of cryptocurrencies.”

While in the US there are investment vehicles like Grayscale Bitcoin Trust (Btc) (OTCMKTS: GBTC) that act like a crypto-ETF, nothing has yet appeared in Australia.

So will we finally see a cryptocurrency ETF debut on the ASX in 2021?

“On balance, we think crypto ETFs on the ASX this year are unlikely,” said Miller.

Incoming US Treasury secretary Janet Yellen has indicated that cryptocurrencies must be kept in check because of concerns that they’re used for money laundering.

“Many nations will look to the [US Securities and Exchange Commission] for leadership, and it has a strong incentive not to rock the boat right now,” Miller said.

“We will get there in the end, but it will be the growing understanding of cryptocurrency amongst progressive institutional investors that will make it happen.”

Alternatives to an ASX-listed cryptocurrency ETF

If you have a share trading account that can access US markets, Australians wanting to dabble in cryptocurrencies do have some options.

The Motley Fool US’ Rick Munarriz last month listed 3 ways he’s dipped his toe in the water:

  1. Buy shares in Grayscale Bitcoin Trust
  2. Buy shares in MicroStrategy Incorporated (NASDAQ: MSTR)
  3. Take the plunge and buy cryptocurrencies directly

MicroStrategy is a business intelligence software maker that’s been in decline the past 6 years. But it’s been making headlines over that time by buying up lots of Bitcoin.

“MicroStrategy has purchased an additional 29,646 bitcoins for US$650 million at an average price of US$21,925 per #bitcoin and now #hodl an aggregate of 70,470 bitcoins purchased for US$1.125 billion at an average price of US$15,964 per bitcoin,” said chief executive Michael Saylor last month on Twitter.

According to Munarriz, that US$1.125 billion is now worth US$1.9 billion for the company.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of June 30th

More reading

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Will we see a cryptocurrency ETF on the ASX this year? appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!