AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Highlights
- The much-awaited Australian crypto ETFs marked their debut on CXA on Thursday.
- Bitcoin has lost a massive 21% this week alone to a 52-week low of US$26,600 by 3:50 PM AEST today.
- Selling in cryptos intensified after Coinbase warned users that they could lose their cryptocurrencies in case the exchange goes bankrupt.
Aussie crypto enthusiasts are in for a treat as they now have an option to invest in cryptos via ETFs. The much-awaited crypto ETFs – ETFS 21 Shares Ethereum ETF (EETH), ETFS 21Shares Bitcoin ETF (EBTC) and Cosmos purpose Bitcoin Access ETF (CBTC) – marked their debut on Cboe Australia Exchange (CXA) on Thursday. However, the widely hyped debut of crypto ETFs comes at a time when the crypto market is going through a nightmarish phase, with tillions reportedly wiped off the market in just a matter of days.
By 3:50 PM AEST, EBTC had recorded the highest volume out of the three at 229,473, followed by EETH and CBTC, whose volumes were noted at 194,545 and 56,270 respectively. Notably, these trading volumes were much lower than another crypto ETF by BetaShares - BetaShares Crypto Innovators ETF – which is listed on the ASX and invests in companies that are directly or indirectly operating in the crypto space.
Image Source: © Josefkubes | Megapixl.com
Another reason for lesser volume can be attributed to the timings of the launch of these crypto ETFs. The crypto market is witnessing a sea of red numbers across the board as investors are almost in a panic state amid soaring inflation.
Bitcoin (BTC) has lost a massive 21% this week to trade at a 52-week low of US$26,600 by 3:50 PM AEST, while the second largest crypto, Ethereum is down over 28% to US$1,814. According to the recent data by coinmarketcap.com, the total market capitalisation of all listed cryptocurrencies is down by a mind-boggling US$1.15 trillion or 18.9% of the total market cap, in the last 24 hours.
Not just cryptos, stablecoins – which were supposed to be more stable as they are pegged against a real asset such as US dollar – have also spooked investors. For example, TerraUSD has witnessed a 10.7% fall in the last 24 hours. Terra (LUNA) has baffled investors with its 96% meltdown.
The selling intensified after crypto exchange Coinbase warned users that they could lose their cryptocurrencies in case the exchange goes bankrupt. The warning came in an earnings report released on Tuesday, which reported Coinbase incurring a net loss of AU$430 million for Q1.
“Because custodially held crypto assets may be considered to be the property of a bankruptcy estate, in the event of a bankruptcy, the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings and such customers could be treated as our general unsecured creditors,” the report said.
Soon after the announcement, Coinbase lost more than 1/4th of the market cap in a jiffy. This week, the stock is down over 48% to US$53.72, as of 11 May 2022.
Bottom Line
Although, Aussie investors might cheer up with the launch of three Crypto ETFs in Australia, the ongoing selling spree might act as a dampener. Long-term investors might consider it a lucrative opportunity to capitalise on this dip, but before investing in any coin, proper due diligence is always recommended.
Watch More: What makes TerraUSD (UST) crypto unique?
