17 Questions
What is the ticker symbol of the first bitcoin spot exchange-traded fund listed on the ASX?
VBTC
The ASX has had bitcoin ETFs listed on its exchange for a long time
False
What is the name of the investment management firm that issued the first bitcoin spot ETF on the ASX?
VanEck
ETFs are investment products that track the performance of an underlying _______________________.
asset
What is the difference between a 'spot' ETF and a 'futures' ETF?
A spot ETF actually holds its underlying investments, while a futures ETF invests in derivative securities.
BlackRock's IBIT product is a futures ETF
False
Match the type of ETF with its description.
Equity ETF = Tracks whole collections of stocks Commodity ETF = Tracks the price of a single commodity Bitcoin ETF = Tracks the price of bitcoin
What type of ETF is ProShares 'BITO'?
Futures ETF
The Australian market for bitcoin ETFs is larger than the US market.
False
What is the name of the American investment manager that launched a similar bitcoin spot ETF in the US?
BlackRock
What is the main benefit of bitcoin ETFs for traditional investors?
They allow traditional investors to access a popular asset class that is still largely unregulated.
The US Securities and Exchange Commission approved __________ spot bitcoin ETFs on January 10 this year.
11
What is the primary concern for huge institutional investors trading ETFs?
Liquidity
A management fee of 1% per year would reduce the returns of an investment by 50%.
False
What is the current market share of institutional entities holding bitcoin?
12.5%
Global X will reduce their ETF's management fee to __________% from July.
0.59
Match the following ETF providers with their respective management fees:
VanEck = 0.59% Global X = 0.59% US ETFs = 0.2%-0.25%
Study Notes
Australian Securities Exchange (ASX) Lists First Bitcoin ETF
- The ASX has listed its first bitcoin spot exchange-traded fund (ETF), issued by VanEck, trading under the ticker symbol "VBTC".
- This is a first for the ASX, although others have been available on the smaller exchange Cboe Australia.
How ETFs Work
- ETFs are investment products that track the performance of an underlying asset, like shares, and can be traded on a public stock exchange.
- Buying an ETF is like buying a basket of different investments, the contents of which can vary.
- ETFs can track the price of a single commodity (e.g., bitcoin or gold) or a collection of stocks.
Spot vs Futures ETFs
- Spot ETFs hold their underlying investments directly (e.g., BlackRock's IBIT).
- Futures ETFs invest in derivative securities to approximate the performance of their nominal investments (e.g., ProShares' BITO).
Bitcoin ETFs
- Bitcoin ETFs allow traditional investors to access a popular asset class through a regulated stock exchange.
- They create new costs, including management fees that can significantly impact returns.
US Market Comparison
- The US market for bitcoin ETFs is significantly larger, with over A$75 billion in combined assets under management.
- The most liquid ETF, BlackRock's IBIT, regularly sees more than A$1 billion in trades in a day.
- In contrast, Australian bitcoin ETFs are smaller in scale, with lower liquidity.
Institutional Involvement
- Institutional investors play a significant role in the US market, driving liquidity and total assets under management.
- 12.5% of bitcoin's 21 million coin supply cap is held by just 90 institutional entities, including countries, publicly traded companies, and ETFs.
Management Fees
- Management fees are a key consideration for smaller retail investors.
- A 1% management fee can result in a significant loss of returns over time (e.g., 1,178lessover10yearsona1,178 less over 10 years on a 1,178lessover10yearsona10,000 investment).
- A "price war" has been ignited between VanEck and rival bitcoin ETF provider Global X, with fees expected to decrease.
The Australian Securities Exchange has listed its first bitcoin spot exchange-traded fund, issued by VanEck, trading under the ticker symbol 'VBTC'. Learn how ETFs work and their role in investment portfolios.
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