Investors smash records on BetaShares cryptocurrency ETF debut
The roaring success of BetaShares Crypto Innovators exchange traded fund has reinforced plans by the company to bring two new cryptocurrency funds to market.
The roaring success of BetaShares Crypto Innovators exchange traded fund has reinforced plans by the company to bring two new cryptocurrency funds to market.
Investors ploughed almost $42.5m into the BetaShares Crypto exchange traded fund on its opening day of trade.
Almost $5.2m was traded in the first five minutes of trade when the fund debuted on the market at 11.01am on Thursday.
The size of the market reception topped previous ASX records for first day trading value, which had previously been notched up at $8m in March this year.
Exchange traded funds are offered to investors as an opportunity to buy a basket of investments, spreading risk.
The crypto offering was marketed as opening the opportunity for investors to take a slice of the booming cryptocurrency market, which despite its risky nature saw investors pile in.
BetaShares even acknowledges the “very high risk” of the sector, noting “crypto-assets are highly speculative in nature and companies with significant exposure to crypto-asset markets can be expected to have a very high level of return volatility”.
Underneath the fund lies investments in Silvergate Capital, which takes 12.3 per cent weight of assets, followed by Marathon Digital Holdings, Galaxy Digital Holdings, Coinbase Global, and others.
Shares in Silvergate Capital open the door to Silvergate Bank, which offers technology platforms to fintechs and digital currency companies.
Marathon Digital Holdings is the parent company of Uniloc which owns Bitcoins and Bitcoin mining operations.
BetaShares CEO Alex Vynokur said the exchange traded fund product was a less-risky option than direct exposure to cryptocurrencies.
“There’s real appetite from Australian investors both from individual investors as well as financial advisers to obtain the exposure to the digital assets ecosystem and do it in a regulated structure,” he said.
“It surpassed our expectations.”
Mr Vynokur said data showed a “barbell” split in investors buying into the crypto exchange traded fund, with large numbers of small investors buying $5000 parcels as well as larger self managed super fund holders buying larger slices.
Mr Vynokur said the success of the cryptocurrency fund launched on Thursday showed the demand that could be in store for further investment products built around at the sector.
As a result BetaShares plans to launch two new exchange traded funds, offering exposure to the Bitcoin and Etherium cryptocurrencies.
Mr Vynokur said the funds would allow exposure to the digital assets without the need to set up crypto wallets or the risk of losing logins and access to the funds.
“We will be able to shed some further colour on that when we’re a bit closer to the date but we certainly look forward to bringing it to the market in the months ahead,” he said.
The launch of the BetaShares crypto fund comes in the same week Commonwealth Bank announced plans to offer capabilities on its app to trade cryptocurrencies.
The bank announced it would offer customers the ability to buy, sell and hold crypto assets and had partnered with one of the world’s largest regulated crypto exchanges and custodians, Gemini, and leading blockchain analysis firm, Chainalysis.
Buy-now-pay-later platform Zip has also announced plans to offer cryptocurrency trading capability through its ecosystem, joining a throng of others jostling for the market.
Trading platform Superhero also allows its customers to buy and sell shares in the ProShares Bitcoin Strategy exchange traded fund, a Bitcoin-linked fund from the United States.
Superhero has indicated it also intends to explore actively offering cryptocurrency trading on the platform.
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