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Australia’s first bitcoin ETF could hit $1 billion after launch next week

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Financial regulators have given the green light to Australia’s first bitcoin ETF, set to begin trading on April 27, and the Australian Financial Review reports it could see as much as $1 billion in inflows.

An ETF is a regulated exchange-traded fund that allows investors to benefit from the price of Bitcoin (BTC) without owning any coins themselves.

Cosmos Asset Management beat local rivals VanEck, BetaShares and EFT Securities in the issuance of Australia’s first Bitcoin ETF. Each company has been in the race to complete regulatory approvals since at least March, according to the Sydney Morning Herald.

The Cosmos Asset Management Bitcoin ETF will be listed on the CBOE Australia with the approval of the Clear Capital Markets Clearinghouse of the Australia Securities Exchange (ASX). The approval came after Cosmos landed the at least four market participants to meet the 42 percent margin requirements required under an article of the April 19 AFR to cover the risk.

The Cosmos Bitcoin ETF provides indirect exposure to spot investing in Bitcoin through the Canadian Purpose Bitcoin ETF.

Australian wealth management firm Zerocap trader Kurt Grumelart called the ETF approval “exciting” and commented that it “validates another institutional adoption” after the record-breaking Betashares CRYP fund investing in crypto-exposed US stocks. At its inception in November 2021, the fund saw $10 million in net inflows within the first 10 minutes.

Grumelart expects the new Bitcoin ETF to be similarly successful

“The event marks a major step forward for Australia and the broader acceptance of the crypto industry as a whole.”

Grumelart predicted that a successful launch will result in an influx of more players. “If overseas markets are any indication, it’s likely that a successful launch will result in a multitude of listings for crypto-asset-backed funds outside of bitcoin,” he said

This will be Cosmos’ second crypto-related ETF since last year when the company launched its Global Digital Miners Access ETF.

Australian regulators have been working over the past year to set clear rules for the crypto industry. The Australian Securities and Investments Commission (ASIC) wants more authority over the industry, but Senator Andrew Bragg says this is inadequate until cryptocurrencies are recognized as financial assets under Australian law.

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Grumelart said he believes clarifying the rules will help the industry develop.

“As the new ASIC regulations for crypto assets come out, we expect more clarity for local custodians and service providers and open this up as a pathway within the coming year.”