1. Three exchange-traded funds (ETFs) for cryptocurrencies quietly launched on Australias CBOE exchange, in another sign of acceptance of the asset class among financial market regulators.
2. The ETFs attracted just over AU$2 million (US$1.4 million) on the first day, a lukewarm reception to what was a highly anticipated launch.
3. David Tuckwell, product and research specialist at ETF Securities the asset manager behind two of the funds says the company expects the investment vehicles may reach AU$1 billion (US$690 million) by the end of the year.
4. While Tuckwells comments are to be expected from the company promoting the ETFs, his family does have an interesting track record with such investments.
5. His father led the charge to list the worlds first ETF for physical gold almost 20 years ago, a product at the time that some traders ridiculed, but was to later open up gold trading to many more investors.
6. The question everyone wants answered is, could ETFs do for cryptocurrency what they did for gold?
7. Exchange-traded funds are a form of pooled security that track specific assets, which can be a basket of stocks or bonds, an industrial sector, a single commodity or other investments.
8. ETFs are listed on exchanges, their prices fluctuating along with the underlying assets, and they can be used as a hedge, to diversify or for other purposes.
9. The worlds first ETFs started up in the 1990s in Canada, and by 2003 in Australia, Tuckwells father, Graham, was behind the idea of an ETF for gold that would give investors a regulated and secure method to trade the metal on a stock market.
10. While gold is known as a traditional store of value, the metal itself is difficult and costly to store and transfer between buyers and sellers. It was also a hard sell as an ETF 20 years ago.
11. Tuckwell said that when his father started to market the idea of a gold ETF in the early 2000s, potential customers were confused and assumed he was trying to sell EFTPOS point-of-sale terminals that process credit card payments at retailers.
12. The eventual product was the ETFS Physical Gold ETF that launched on the Australian Stock Exchange (ASX) in 2003 under the ticker GOLD.
13. Gold hit
14. It proved a hit with Australian investors, attracting more than AU$50 million (US$34.60 million) of investment in the first six months.
15. In the following decade, gold prices jumped over 400% to a then-high of US$1,896, before falling back and then picking up again in late 2020 amid the economic uncertainty caused by the Covid-19 recession, reaching a new all-time high