Cryptocurrency

Crypto exchange-traded funds a fizzer on debut – Sydney Morning Herald


Other investors also may have been waiting to see if the local crypto ETFs experienced any technical glitches on their debut. There were none.

The crypto ETFs had low trading volumes, partly attributed to the fact that some brokerage platforms do not support their trading, as they are required to hold much higher levels of collateral against each trade, because of crypto’s extreme volatility.

‘As with all highly speculative investments, we would encourage investors to not get swept up in the hype.’

Chris Brycki, founder of Stockspot

The crypto-tracking ETFs listed on Cboe – ETF Securities’ bitcoin-tracking ETF (ticker code EBTC) and its Ethereum-tracking ETF (EETH), and Cosmos Asset Management’s (CBTC) fund that tracks bitcoin – will be followed by more crypto-tracking ETF listings.

BetaShares and VanEck are planning to launch crypto ETFs on the Australian Securities Exchange, but they are understood to still be weeks away from making their debuts.

The Australian Securities and Investments Commission gave the crypto ETFs the green light last year, but providers have to satisfy a number of stringent conditions aimed at protecting investors.

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“As with all highly speculative investments, we would encourage investors to not get swept up in the hype,” says Chris Brycki, founder of Stockspot, an online investment adviser and fund manager.

He says the price of bitcoin could easily double – or fall by 80 per cent or more – within a 12-months.

“We don’t think you need these products in a diversified portfolio,” Brycki says. “We believe gold is a much better defensive asset [that can also be accessed through ETFs].”

“If people do want to invest in them, only allocate a small percentage of your overall portfolio and ‘dollar-cost average’,” Brycki says, referring to the strategy of drip feeding money into the investment, rather than ploughing in cash in one large hit.

Units in ETFs can be bought and sold just like shares in listed companies. They track the prices of all types of markets.

Crypto ETFs are convenient for investors who otherwise face the hassles of owing crypto directly, such as the need to go through a crypto exchange, and to have passwords and digital wallets.

  • Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.



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