ASX's first cryptocurrency ETF is listing Thursday

They said it couldn't happen this year, but it will. From this week, you can buy ASX shares that'll follow the fortunes of cryptocurrencies.

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It's finally happening.

After much scrambling this year, a cryptocurrency-themed exchange-traded fund (ETF) will list on the ASX on Thursday.

While several vendors are understood to be working on the concept, the first to market will be BetaShares Crypto Innovators ETF (ASX: CRYP).

The Motley Fool has confirmed that shares for the fund will be publicly tradable on Thursday.

Mainstream acceptance has taken off this year

It was only in January that an expert declared it "unlikely" that a cryptocurrency ETF would debut this year on the stuffy old ASX.

"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," Kraken managing director Jonathon Miller said at the time.

"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."

But industry developments have zoomed ahead at warp speed since, especially in the past month or so.

One massive milestone a couple of weeks ago was the listing of US ETF ProShares Bitcoin Strategy ETF (NYSE: BITO).

That fund tracks Bitcoin (CRYPTO: BTC) futures contracts and became the second-most traded ETF on its debut day.

Such a fund traded on the NYSE had as much symbolic significance as financial.

It represented yet another step in 'mainstream' acceptance of cryptocurrencies.

Closer to home, the Australian Securities and Investments Commission (ASIC) on Friday released its guidance on cryptocurrency-related investment products.

BetaShares chief Alex Vynokur welcomed the nod from the corporate watchdog for Australians seeking cryptocurrency exposure but afraid of trading on "unregulated exchanges".

"ASIC has taken a significant step in providing a clear path for established cryptocurrencies such as bitcoin and ether to be made available to Australian investors via a familiar ETF structure," he said.

"In many ways, the inherent benefits of a regulated ETF — convenience, transparency and cost-effectiveness — are additive for many investors seeking exposure to cryptocurrencies."

What does the BetaShares CRYP ETF invest in?

The new BetaShares fund, like the ProShares one in the US, will not directly plough its money into cryptocurrencies.

Instead, it will "aim to track" the Bitwise Crypto Industry Innovators 30 Index before fees and expenses.

"CRYP's index is designed to capture the full breadth of the crypto ecosystem by providing exposure to pure-play crypto companies, those whose balance sheets are held at least 75% in crypto-assets, and diversified companies with crypto-focused business lines," states the BetaShares website.

According to Bitwise, the top 3 holdings in the index as of October 28 were:

  • Galaxy Digital Holdings Ltd (TSE: GLXY): 12.95%
  • Coinbase Global Inc (NASDAQ: COIN): 11.15%
  • MicroStrategy Incorporated (NASDAQ: MSTR): 9.79%

Motley Fool contributor Tony Yoo owns shares of Bitcoin and Coinbase Global, Inc. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin. 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.

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