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Australia’s ASX approves its first spot Bitcoin ETF


While the SEC has authorised spot Bitcoin ETFs, the US regulator has only approved 19b-4 filings for eight spot Ether ETFs, and the agency has not yet greenlighted the S-1 (registration statement) filings, which must be completed and declared effective before the spot Ether ETFs can launch.

More clarity on the latest developments in the approval procedure has been provided by Gary Gensler, SEC chairman, during his testimony before the U.S. Senate Appropriations Subcommittee on Financial Services. Pressed by questions raised by senators, Gensler stated that the final greenlight to spot ether ETFs could come as soon as this summer. However, the proceedings needed for the greenlight are duties to be managed by the issuers, not by SEC staff.

Third spot Bitcoin ETF for Australia

In the meantime, ASX (the Australian Securities Exchange), which accounts for around 80% of the country’s equities trading, has approved its first Bitcoin spot ETF. This represents the third in Australia, following the two already available on rival exchange Cboe, and such a decision could influence other regulators to make similar decisions, contributing to the growth and maturation of the global cryptocurrency market.

“Although these news testify the evolution and wider acceptance of crypto assets, it is unlikely we are going to see something similar in Europe soon,” said Alpay Soytürk, Chief Regulatory Officer of Spectrum Markets, the pan-European trading venue. “The reason lies behind the UCITS Directive, which contains diversification rules for the inclusion of indices as ETF underlyings, and virtually none of them allow for a disproportionate concentration risk on individual securities.”

Soytürk said this also calls for a reconsideration of how the protection provided by authorization from a securities regulator should be evaluated. “We do not intend to criticize the whole Bitcoin or Ethereum projects, but rather to question whether authorizing investment funds in individual securities is a sensible measure,” he said.

Authorised ETFs offer investor opportunities

Of course, the ETFs now authorized offer the opportunity to gain exposure to Bitcoin or Ethereum without having to hold the crypto assets directly.

Firstly, there have been alternatives before, such as securitised derivatives on BTC or ETH. Secondly, the ETF authorisation paves the way for large institutional institutions to become heavily involved in distribution, as the fierce fee competition among large US asset managers has already shown in the recent past.

“If this results in private investors with a rather conservative risk profile and investment objectives that do not correspond to this type of security becoming more involved and being unable to adequately compensate for strong downturns, securities regulators will be caught in the crossfire,” said Soytürk.

Spectrum Markets in major ETF platform launch

Spectrum Markets added 1,757 Exchange Traded Funds (ETFs) for trading by its clients this month. Spectrum said it is responding to the rise in popularity of ETFs, which have gained investor interest due to their diversification, liquidity and competitive fees.

A major market-maker in Germany, ICF Bank AG, the German securities trading bank, will provide liquidity for ETFs on Spectrum. Selected through a rigorous process, ICF Bank was chosen for its quality of execution, uptime presence in the order book, and pricing quality.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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