Bitcoin ETFs Gain Global Traction: U.S. Approval Sparks Race for Regulatory Nods, Australia Leads the Charge

• Unprecedented momentum anticipated for spot Bitcoin ETFs globally.
• Asian and African regions are keenly watching regulatory developments.
• Australian Securities Exchange (ASX) is expected to approve spot Bitcoin ETFs in early 2024.

The anticipated approval of exchange-traded funds (ETFs) for spot bitcoin (BTC) by the U.S. Securities and Exchange Commission (SEC) has the potential to set a precedent for regulatory nods across Asia. While some regions may not immediately establish ideal policies, analysts suggest that the SEC’s approval could catalyze momentum in the crypto space.

Concerns among U.S.-based industry analysts have revolved around the nation potentially lagging if clear and favorable regulatory frameworks are not implemented. With the approval of spot bitcoin ETFs in the U.S., the country gains a competitive advantage over Asia and Africa, where such products are yet to receive regulatory approval (the European Union and other nations already have bitcoin ETFs).

Australia Emerges as Front Runner in Regulatory Race

Several analysts and industry participants, including those in the UAE, Singapore, and Hong Kong, have identified Australia as a likely frontrunner to approve spot bitcoin ETFs. The Australian Securities Exchange (ASX) is expected to grant approval in the first or second quarter of 2024, positioning Australia ahead of other jurisdictions in the region.

While Australia already has two exchange-traded products for spot crypto assets, the focus is on the potential listing of a similar product on ASX due to larger trading volumes. Monochrome Asset Management’s Monochrome Bitcoin ETF, which applied in July 2023, is poised to lead the way, pending approval.

In contrast, Hong Kong, Singapore, and the UAE have expressed ambitions to become crypto hubs but have yet to see the approval of bitcoin ETFs within their jurisdictions. Hong Kong, in particular, is showing interest and may be the next to approve spot crypto ETFs, with regulatory developments gaining momentum following the U.S. approvals.

Singapore Warms Up to Bitcoin ETFs as UAE Faces Challenges

Singapore, known for its cautious approach to crypto regulations, may now be more inclined to allow products like bitcoin ETFs to leverage the liquidity generated by U.S. approvals. However, the Monetary Authority of Singapore (MAS) emphasizes that spot Bitcoin ETFs are not approved for retail investors, urging caution for those trading in overseas markets.

In contrast, the UAE, while aspiring to be a crypto hub, may face challenges in immediately endorsing Bitcoin ETF-type products. A former regulator suggests that the conditions in the UAE/MENA region are not conducive, citing the need for traditional finance players and sufficient market liquidity. Connectivity issues and the high cost of establishing links with other markets currently make it less likely for the UAE to endorse spot bitcoin ETFs at this time.