Two spot crypto ETFs launched in the Australian market

Two more cryptocurrency-backed exchange-traded funds (ETFs) launched on the Cboe Australia exchange on Monday, bringing the total number of cryptocurrency ETFs available to Australian traders to six.

Canada-based 3iQ Digital Asset Management has launched two spot ETFs, the 3iQ CoinShares Bitcoin (BTC) Feeder ETF and the 3iQ CoinShares Ether (ETH) Feeder ETF.

The two Australian funds, 3iQ CoinShares Bitcoin (BTC) Feeder ETF and 3iQ CoinShares Ether (ETH) Feeder ETF, will both draw money from Canadian ETFs listed on the Toronto Stock Exchange (TSX). The underlying assets of the Canadian ETF are BTC and ETH held in cold storage on the Gemini cryptocurrency exchange.

3iQ’s fund joins the bitcoin and ethereum funds of 21Shares and Cosmos Asset Management, which delayed the launch in April after a still-unnamed service provider needed time to support the offering.

Three ETFs — a bitcoin and ethereum ETF from 21Shares and a bitcoin ETF from Cosmos — finally opened for trading in early May, becoming Australia’s first crypto ETF. Cosmos subsequently launched an ethereum fund on May 31.

Much like the 3iQ fund, the Cosmos ETF’s underlying assets are direct investments in Canadian Purpose bitcoin and ethereum ETFs, while the 21Shares-issued fund is backed by Coinbase’s cold-storage bitcoin and ethereum reserves.

The difference is that 3iQ has the lowest expense ratio of the six funds, 1.2 percentage points — 0.05 percentage points — lower than 21Shares and Cosmos, which have an expense ratio of 1.25%.

The initial trio of funds from 21Shares and Cosmos had a poor start, with just $1.3 million in first-day trading, well below projected inflows of $1 billion. 21Shares’ two funds saw combined inflows of about $936,500, while Cosmos’ Bitcoin fund saw inflows of more than $398,000.

According to Cboe data at the time of writing, the two 3iQ ETFs traded 13,592 shares and 9,754 shares for Bitcoin and 9,754 shares, or about $73,415 and $73,605 respectively, for a total of over $147,000, well below their competitors .