VanEck’s Bitcoin ETF entry to ASX sparks fees war

The first exchange-traded fund to invest directly in Bitcoin has made its entry onto the Australian Securities Exchange, with the cryptocurrency faithful cheering the start of a price war among ETF providers.

VanEck earlier this week became the first applicant to get a green light to trade on the local bourse.

It launched on Thursday with a seed investment of about $985,000 and it will be a feeder fund for the $US647 million ($970m) VanEck Bitcoin Trust in the US.

Its debut comes just months after similar products began trading in the US and Hong Kong, with Bitcoin ETFs making it easier for investors in more traditional assets — such as stocks and bonds — to dip their toes into crypto without having to open a separate high-fee account.

VanEck Asia Pacific chief executive Arian Neiron said the fund recognised Bitcoin as an emerging asset class that people wanted to access, citing its own research that found 76.2 per cent of advisers had clients enquiring about Bitcoin.

“We have developed a robust offering that we believe provides an opportunity for bitcoin exposure using a regulated, transparent and familiar investment vehicle,” Mr Neiron said.

“VBTC also makes Bitcoin more accessible by managing all the back-end complexity. Understanding the technical aspects of acquiring, storing and securing digital assets is no longer necessary.”

VanEck’s ETF debuted at $19.81 and closed the day at $20.06, with trading volumes worth just $3 million.

But its entry as the lowest-cost Bitcoin ETF provider has prompted other major players to slash their fees. VanEck’s fee of 0.59 per cent has now been matched by Global X, which partners with crypto trader 21shares on a local Bitcoin ETF offered through smaller Australian exchange Cboe.

Monochrome Asset Management’s own Bitcoin ETF joined Cboe earlier this month and is now valued at $100m, offering a fee of 0.98 per cent.

Those prices may seem attractive to those Australian retail investors looking to make their first foray into cryptocurrency but they still lag those offered by providers in the US, which can charge as low as 0.25 per cent.

VanEck’s listing comes in the wake of the $86 billion amassed by debut US Bitcoin ETFs this year, including offerings from BlackRock and Fidelity Investments as well as VanEck. Hong Kong permitted spot ETFs for Bitcoin and Ether in April, but they garnered a fraction of the interest of the US vehicles.

BetaShares and Perth-based blockchain minnow Digital X are also campaigning to list a Bitcoin ETF on the ASX, with chief executive Lisa Wade saying “the industry is growing up”.

The price of Bitcoin has almost quadrupled since the start of 2023 in a comeback from a deep bear market. The rally reached a record high of $US73,798 in March but the token slipped back and momentum stalled of late. It is now worth $US65.110.