Some massive news for crypto last week, but it’s not even out of nappies.
Want to know what was the hottest stock on the ASX last week?
Was it a junior lithium miner? A new fintech offering? An electric vehicle manufacturer with a rock-star CEO?
Nope. It was a Crypto ETF.
And it broke all records.
Thousands of local investors have gained exposure to the wild cryptocurrency market for the first time, tipping money into the record-breaking $40 million float of an Australian Securities Exchange-listed fund made up of global bitcoin mining, blockchain infrastructure and digital asset trading stocks.
The BetaShares Crypto Innovators ETF (ASX: CRYP) attracted $8 million worth of trades within 15 minutes of its ASX debut at 10.30am on Thursday, breaking the first-day record held by Hyperion Asset Management for the launch of its Global Growth Companies Fund in March.
By midday, it had amassed trading volumes of $24.5 million and closed the day with net buys of $39.7 million. Market sources expect it to have at least $42 million in funds under management once settled – about five times bigger than any previous ASX-listed ETF in its first day of trading.
…CRYP is the first ASX-listed investment product to provide exposure to crypto markets but does not invest in digital tokens or applications directly.
Instead, the fund will buy shares in companies listed on global sharemarkets and with a market capitalisation of at least $100 million that service the “digital asset economy”.
Think of an ETF as a thematic bundle of stocks, and the thematic bundle here is the ‘picks and shovels’ of the crypto universe.
It’s the first to launch in Australia, but it’s not the first to experiment with the concept. In America, an ETF investing in bitcoin futures, managed by US firm ProShares, broke an 18-year record when it amassed $US1 billion in assets within two days of listing on the New York Stock Exchange last month.
But why? Why are investors going to listed ETFs rather than buying tokens directly.
The most obvious reason is that the crypto universe is young. Very young. If you’ve been reading my blogs for a while, you’ll know it’s been on the radar for years now.
But in terms of adoption, it’s still a baby wrapped in blankets. Only 3% of the global population own any crypto at all.
And most people just wouldn’t know where to start.
But the second reason is that the institutional players are still figuring out how to give their clients access to the gains crypto has to offer, while still meeting their strict fiduciary responsibilities.
Listed-ETFS, which jump through all the regulatory hoops that listed companies do, gives these big players the peace of mind they need.
So for me, it goes to show just how much demand is out there right now.
And just how young the space actually is.
And yep, if you put those too together – a young space with massive demand – then there are definitely some big opportunities to be had.