Coinbase Secures Custodial Role for Australia’s New Spot Bitcoin ETF by DigitalX

DigitalX announced on July 19 that cryptocurrency exchange Coinbase would be its custody partner for its new spot Bitcoin ETF (BTXX). The custody of the DigitalX Bitcoin ETF (BTXX) shows the exchange’s growing role in supporting the infrastructure for Bitcoin ETFs worldwide.

DigitalX Selects Coinbase as Custody Provider for Its Latest Australian Spot Bitcoin ETF

This information was confirmed in the official BTXX fact sheet released by DigitalX.

BTXX seeks to provide returns that mirror the performance of Bitcoin by maintaining long-term holdings of BTC.

“The fund is intended to be a passive holder of Bitcoin and will not buy and sell Bitcoin other than to facilitate redemptions and creation of Bitcoin interests,” the fact sheet reads.

Coinbase to Provide Custody for Australian Bitcoin ETF BTXX

Digitalx, an ASX-listed company, has selected Coinbase to deliver custody and advanced trading execution services for its recently approved Bitcoin exchange-traded fund (BTXX) in Australia. This partnership will offer… pic.twitter.com/KNglSEzB33

— EchoeWeb (@Echoeweb) July 29, 2024

The DigitalX Bitcoin ETF (BTXX) was launched on July 12, following approval from the Australian Securities Exchange (ASX) on July 9.

Since the approval of spot Bitcoin ETFs in the United States in January 2024, Coinbase has become a partner and custody provider for ten spot Bitcoin ETFs and eight of the nine newly approved Ether ETFs.

A custodian is a certified company that holds the digital assets of companies or individuals on their behalf. So, custodians play a critical role in the growth of the ETF market as they secure billions of dollars worth of crypto that the ETF owns.

Meanwhile, the DigitalX spot Bitcoin ETF is not the first Australian spot Bitcoin ETF. Recall that the country’s first Bitcoin ETF, VanEck Bitcoin ETF (VBTC), was launched on the Australian Securities Exchange (ASX) on June 20.

VBTC is structured as a feeder fund to provide exposure to Bitcoin by investing in VanEck’s US Bitcoin Trust (HODL), listed on the Chicago Board Options Exchange (CBOE).

Crypto Adoption and Regulatory Climate in Australia

Australia has seen noteworthy growth in crypto ownership and adoption in recent years. The crypto ownership rate in Australia stands at 17%, surpassing the global average of 15%.

According to independent research conducted by Roy Morgan, the number of Australians engaging with digital assets has reached unprecedented levels.

Their findings indicate that over 1.1 million Australians now own at least one form of cryptocurrency.

The Australian Tax Office (ATO) has also shed light on the scale of crypto adoption in a report that disclosed that approximately 600,000 Australians have officially declared crypto holdings in their tax returns.

Additionally, a 2022 survey conducted by the Australian Securities and Investments Commission (ASIC) places cryptocurrencies as the second most popular investment product among Australians, trailing only behind domestic shares.

Despite the interest and adoption, the regulatory environment for cryptocurrencies in Australia remains hostile.

Countries with Active Bitcoin ETFs:
USA
Brazil
Canada
Germany
Australia
Hong Kong
Switzerland

The global adoption of Crypto ETFs is expanding, offering investors innovative ways to engage with the evolving cryptocurrency market. This widespread…

— Rahul Rohit Parikh SaitaChain (@rahulparikh94) June 5, 2024

For instance, Binance Australia encountered challenges in May 2023 when it had to suspend Australian dollar deposits and withdrawals due to third-party service provider issues.

The situation became even more complex in July 2023 when ASIC conducted searches at Binance Australia’s offices.

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