Two exchange-traded fund (ETF) issuers of digital assets in Australia are set to exit the market amid heightened regulatory scrutiny and a deep crypto winter, though some remain optimistic about market prospects .
Over the past week, Australian crypto ETF providers including Holon Investments and Cosmos Asset Management have signaled that they may be exiting the crypto ETF scene.
On Nov. 6, Holon said it may shut down its three retail crypto funds following a hardline stance by Australia’s financial regulator that accused the fund of failing to “describe investor risks in its market determination documents.” target”. alternating currentrope to a report by the Australian Financial Review (AFR).
This comes after the Australian Securities and Investments Commission (ASIC) issued an interim halt order on October 17 against the three Holon funds due to non-compliant target market determinations (TMDs).
The AFR report notes that Holon argued that crypto funds were designed to be part of a diversified portfolio, not the majority of an investment strategy, although it may have fallen by ear of a deaf person.
Another crypto ETF issuer, Cosmos, is also jumping ship with last week’s announcement that it would delist its crypto ETFs from the market. Australia Cboe Exchange.
According to the report, sources said Cosmos failed to attract enough assets under management to remain viable. It also had heavy crypto custody overhead and professional liability insurance costs.
According to public disclosures in September, Cosmos had approximately $1.6 million in assets under management for its combined BTC and ETH funds.
However, some crypto ETF providers seem to remain committed to the market, which should see one million new crypto users over the next 12 months, according to a recent survey by crypto exchange Swyftx.
Providers currently involved in the Australian crypto ETF market include 3iQ Digital Asset Management, Monochrome Asset Management, and Global X Australia, formerly known as ETF Securities.
Global X Australia Managing Director Evan Metcalf Told the AFR that the firm continues to have “a strong belief in digital assets and has no plans to close any crypto ETPs”, noting:
“We are very bullish on the crypto markets in general, digital assets and decentralized finance – we see huge potential there.”
Metcalf noted, however, that the funds had had a “relatively quiet” reception from investors amid the current market downturn, while there was a “reluctance” from local brokers to provide clients with access to its funds. .