Bitcoin ETF hits the ASX. Here's what you need to know

History is being written on the ASX today as it welcomes its first Bitcoin ETF.

| More on:
Bitcoin ETF digital illustration.

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

Today is a historic day for Aussie cryptocurrency investors. Bitcoin (CRYPTO: BTC) will be available via the ASX for the first time as the Australian Securities Exchange welcomes the VanEck Bitcoin ETF (ASX: VBTC) to its bourse.

Other exchange-traded fund (ETF) providers have launched Bitcoin ETFs in Australia before. In May 2022, Global X Management — in partnership with 21Shares — opened the door to its Bitcoin ETF on Cboe Australia (formerly known as Chi-X).

However, today's milestone marks the first of its kind for the largest stock exchange in Australia.

The original cryptocurrency is up 143% over the last year, fetching US$65,453 for one Bitcoin. Investors pushed the price higher in anticipation of its fourth 'halving' in April this year, reducing its further supply by 50%.

Breaking Bitcoin barriers with ASX debut

According to the 2024 Finder Consumer Cryptocurrency Report, approximately a quarter of Australians have owned or are interested in owning crypto. However, obtaining it can prove difficult for some.

VanEck Australia aims to make the journey to investing in Bitcoin easier by making the cryptocurrency available through a traditional financial product. Being an ASX-listed ETF is another important facet of the launch.

Through its own research, the asset manager discovered that 33% of surveyed advisers would include a Bitcoin ETF in their portfolios for clients if it were available on the ASX.

In describing the appeal of the spot Bitcoin ETF, VanEck Asia Pacific CEO Arian Neiron explained:

VBTC also makes Bitcoin more accessible by managing all the back-end complexity. Understanding the technical aspects of acquiring, storing and securing digital assets is no longer necessary.

Moreover, the new crypto investment option is being marketed as 'the most cost-effective Bitcoin fund exposure in Australia'. VanEck's product disclosure statement outlines an annual management fee of 0.59%. The Global X Bitcoin ETF carries a 1.25% management fee for comparison.

What is a 'spot' Bitcoin ETF?

The term 'spot' is derived from the spot price of an asset. In other words, spot Bitcoin ETFs give the investor exposure to the underlying value of Bitcoin at market prices. Meanwhile, other 'non-spot' Bitcoin ETFs can use derivatives, such as futures contracts, to mimic the underlying asset's returns.

VanEck is not alone in its pursuit of bringing Bitcoin to the ASX.

Reportedly, DigitalX Ltd (ASX: DCC) is hot on the heels of VanEck. The alternative wholesale fund manager is also evaluating an ASX-listed spot Ether ETF down the track.

Editor's note: After this article was published, a reduction in the Global X 21Shares Bitcoin ETF (EBTC) management fee was announced to match VanEck's 0.59%. The reduction will take effect from 1 July 2024.

Motley Fool contributor Mitchell Lawler has positions in Bitcoin and Ethereum. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Ethereum. The Motley Fool Australia has positions in and has recommended Bitcoin and Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Cryptocurrencies

Concept image of Bitcoin and hand using laptop.

Buying Bitcoin? Here's why Block's Jack Dorsey says AI will drive global adoption

Moving forward, Block plans to reinvest some of its monthly profits into Bitcoin.

Read more »

A man holding a mobile phone walks past some buildings

The Betashares Crypto Innovators ETF (CRYP) is up 37% in a month. Is it too late to buy?

Looking at the CRYP ETF? Here's my take on whether it's too late to buy.

Read more »

Bitcoin ETF digital illustration.

Why is the BetaShares Crypto Innovators ETF (CRYP) surging on Thursday?

Some massive Bitcoin news is lifting this ETF today.

Read more »

A woman holds a bitcoin token in her hand as she smiles at the camera in the background.

Bitcoin ETF approved. When is it coming to Australia?

Crypto bulls will be celebrating this milestone moment.

Read more »

person dancing in bitcoin spectacles wearing a gold outfit with hands up.

Bitcoin price rockets to 21-month highs. Here's why

The Bitcoin price is now up more than 174% in 12 months.

Read more »

BTC spelt out on wooden blocks with a red sign going down.

Bitcoin price sinks from 21-month high as ETF rumours swirl

What's going on with this cryptocurrency this week?

Read more »

person dancing in bitcoin spectacles wearing a gold outfit with hands up.

Up 145% in a year, the Bitcoin price just smashed through 18-month highs!

After a horror year in 2022, the Bitcoin price has come roaring back in 2023.

Read more »

Two investors look at a graphic showing a bitcoin in the centre

Why did the Bitcoin price just hit a 17-month high?

The long-standing cryptocurrency is finding its feet to reclaim a price not seen since May 2022.

Read more »