ASX set to welcome first cryptocurrency ETF… but there’s a catch

The ASX is set to host its first crypto ETF, sort of…

| More on:
a cryptocurrency blockchain miner acts with surprise upon looking at his phone while standing behind a conglomeration of technology to access cryptocurrency.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The ASX is home to more exchange-traded funds (ETF)s than most of us could imagine. Sure, you have the vanilla index funds like the Vanguard Australian Shares Index ETF (ASX: VAS) that remain uber-popular. But there are also ETFs covering what seems to be everything under the sun.

There are ETFs for crude oil, gold, silver, platinum and palladium exposure. Want an ETF that tracks the South Korean economy? Easy. Or Indian shares? Done. ASX ETFs also cover cash, property or government bonds. Like we said, everything under the sun.

Well, not exactly. There is one glaring exception. And that would be cryptocurrencies like Bitcoin (CRYPTO: BTC). Cryptos are perhaps the only major asset class not covered by an exchange-traded fund on the ASX today.

But that might be about to change.

ETF provider BetaShares has just announced that it will be launching a cryptocurrency-based ETF, a first on the ASX. It will be known as the BetaShares Crypto Innovators ETF and will have the ticker code ‘CRYP’.

There is a catch though. This ETF won’t be directly investing in cryptocurrencies like Bitcoin, Ethereum (CRYPTO: ETH) or even Dogecoin (CRYPTO: DOGE). Rather, it will be focusing on the “global companies driving the rapidly growing crypto economy”.

Will this new cryptocurrency ETF invest in Bitcoin?

BetaShares tells us that CRYP will “aim to track an index comprising a focused portfolio of more than 30 leading crypto innovators”, including Coinbase Global Inc (NASDAQ: COIN)Riot Blockchain Inc (NASDAQ: RIOT) and MicroStrategy Incorporated (NASDAQ: MSTR).

In this way, BetaShares is aiming to tap “picks and shovels” exposure to crypto rather than directly holding cryptocurrency assets — and the “complications” that come with it. You can expect CRYP’s other holdings to contain companies that enable “crypto mining equipment, crypto trading venues, and other key services that allow the crypto economy to thrive”.

According to a report in the Australian Financial Review (AFR) today, BetaShares CEO Alex Vynokur says the company is still aiming to release an ETF backed directly by cryptocurrencies but reckons the regulatory framework just isn’t there yet.

“But we’re well on our way,” he told the AFR. “An ETF structure provides much-needed investor protection, and transparency and accountability, things that investors don’t get now buying cryptocurrencies in unregulated venues.”

It’s not BetaShares’ first attempt at a crypto-focused ETF though. Back in 2018, BetaShares announced its intentions to launch a similarly-themed ETF called the BetaShares Global Blockchain Innovators ETF (ASX code was to be BLOK). However, this ETF never launched and has presumably been put on ice.

Hopefully, this new cryptocurrency ETF from BetaShares will fare a lot better than its predecessor.

Motley Fool contributor Sebastian Bowen owns shares of Bitcoin, Coinbase Global, Inc., and Ethereum. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Ethereum. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended MicroStrategy. 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.

More on ETFs

recreational fisherman holding fishing rod and hands apart indicating it was this big with smile on his face

Here’s how much the Vanguard Australian Shares Index ETF (VAS) has paid in dividends over the past 5 years

How much dividend income does the VAS ETF throw off exactly?

Read more »

Man looking amazed holding $50 Australian notes, representing ASX dividends.

2 excellent ASX ETFs to buy for dividends

These ETFs provide plenty of income for investors...

Read more »

ETF written on cubes sitting on piles of coins.

Here’s why the iShares S&P 500 ETF (IVV) has climbed 7% in a month

It’s been a solid few weeks for US shares. What’s happening?

Read more »

A cute young girl wears a straw hat and has a backpack strapped on her back as she holds a globe in her hand with a cheeky smile on her face.

2 reasons to consider buying the Vanguard International Shares ETF (VGS) right now

What's to like about this popular ETF from Vanguard?

Read more »

A man sits bolt upright watching something intently on his television.

2 quality ETFs for ASX investors to buy in August

Here are two top ETFs to buy...

Read more »

The letters ETF sit in orange on top of a chart with a magnifying glass held over the top of it

3 top ETFs for ASX investors to buy next week

These highly rated ETFs could be in the buy zone...

Read more »

ETF written in blue with a man and woman sitting on their laptops.

2 exciting ETFs for ASX investors to buy today

Here are a couple of highly rated ETFs...

Read more »

Disappointed man with his head on his hand looking at a falling share price his a laptop.

Why the BetaShares ASIA ETF is 50% below its former glory

Why has this tech-heavy ETF had such an awful run of late?

Read more »