(Kitco News) - The launch of crypto-related exchange-traded funds (ETF) has been heralded by many in the industry as proof that the sector is on its way to mass adoption, but for some, the onset of crypto winter has made it impossible to survive.
According to a report from Bloomberg, a handful of ETFs that launched in the Australian market are now headed for delisting following the poor performance of the asset class in 2022.
The funds in question include the Cosmos Purpose Bitcoin Access ETF, Cosmos Purpose Ethereum Access ETF and Cosmos Global Digital Miners Access ETF. The management teams for the ETFs have applied to revoke their quotations on the exchange run by Cboe Australia Pty.
Cosmos Asset Management emerged as an early leader in the race to launch the first crypto ETF in Australia, but it appears to have entered the market at the wrong time as the total crypto market cap lost $2 trillion in value over the past 12 months, leading to a collapse in demand.
“While we strongly believe in the asset class, we are all disappointed with this result, however, we will continue to follow the process in the best interest of all unit holders,” Dan Annan, chief executive at Cosmos, wrote in an email.
Evidence of their poor performance can be found in the assets held by each fund, with the Cosmos Bitcoin and Ethereum funds having a total of approximately A$1.1 million ($710,000) worth of assets, while the miners’ vehicle has about A$630,000.
The Global X Bitcoin and Ether funds are still available to investors in Australia and have a combined market value of around A$8.5 million.
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While the loss of the ETFs isn’t a major blow to the market in Australia due to the limited engagement, it does damage the country’s standing in the eyes of the crypto community, who could now turn to other locales to meet their crypto needs.
“Australia’s hope of becoming Asia’s crypto hub now diminishes, especially after Hong Kong just announced a pathway for Bitcoin and Ether ETFs,” said Rebecca Sin, an ETF analyst at Bloomberg Intelligence.
The analyst was referring to an announcement out of Hong Kong this week that the government of the Special Administrative Region intends to restore “suitable” crypto access for retail investors, including the possible introduction of exchange-traded funds for digital assets.
