The first spot bitcoin ETF will make its debut on the Australian Securities Exchange (ASX) on June 20. VanEck’s ETF has been admitted to trading; while applications from other issuers are being reviewed. How will this affect the crypto market? And how significant will trading on this platform be for price discovery?
1. A listing on a major regulated exchange like the ASX boosts the legitimacy of cryptocurrencies and opens them up to a wider range of investors, including institutional players.
2. A spot BTC ETF provides the opportunity to invest in bitcoin in a more traditional way through a regulated instrument. This could attract new money from conservative investors into the crypto space.
3. Although it is difficult to estimate the scale, capital inflows through the ASX ETF could cause bitcoin to rise slightly, especially if demand is high.
However, given that spot bitcoin ETFs are already trading in the US and other jurisdictions, the impact of an Australian listing may be limited. It is therefore unlikely that this move will come as much of a surprise to the market.
As regards price discovery, the impact may be moderate in the short term. More likely, the ASX listing will add further enhance the legitimacy and accessibility to bitcoin for Australian investors, thereby bolstering its status as an asset class.