Australian Bitcoin Spot ETF Launch Is Delayed

The first bitcoin spot ETF in Australia has been delayed, reportedly by a ‘prime’ broker, and it is unclear when it will start trading.

• The first Australian bitcoin spot ETF from Cosmos Asset Management has been delayed.
• The delay comes as a surprise since the national clearing house and corporate regulator had previously greenlit the product.
• AFR reports that an unknown “prime” or “executing” broker is behind the delay.

ETF Securities and 21 Shares were set to launch Australia’s first bitcoin spot exchange-traded fund (ETF) on April 27, but the product’s listing has now been delayed.

An announcement from the Cboe Australian exchange explaining the delay came as a surprise since both the corporate regulator and national clearing house, ASX Clear, had already given the green light for the ETF’s launch.

“We are now at our minimum number of clearing participants and that means we are good to go,” said Hamish Treleaven, the chief risk officer at ASX, at the time.

Cboe explains the delay as a matter of routine checks and balances.

“Standard checks prior to the commencement of trading are still being completed,” Cboe stated in a Tuesday announcement.

However, a report by the Australian Financial Review blames the delay on “a powerful prime broker.”

The report from AFR states that while the Cboe was quick to position this decision as part of a routine process, “multiple market sources expressed frustration” that the five-month approval process had once again been delayed for the speculated $1 billion inflow expected upon approval.

AFR detailed that a “service provider downstream” caused the delay, explaining that the entity is a “prime” or “executing” broker. Whoever this service provider is, its approval is needed for the market maker – an appointed entity that sets bid and ask prices for the ETF – to operate a functional marketplace.

A spokesperson for Cosmos Asset Management, another issuer that would launch a bitcoin ETF on the same day, reportedly stated, “Cosmos AM has approval from the exchange to commence quoting and we’re working towards that goal.”

However, sources close to Cosmos reportedly stated they were hopeful the strategy of buying units from the existing Purpose Bitcoin ETF listed on the Toronto Stock Exchange, rather than actual bitcoin, might be more appealing to the prime broker which would allow them to list before its competitors.

Cboe said it would provide an update in the coming days.