Doug Goodwille from Kayne Anderson speaks to Drew Meredith from The Inside Network on market thinkers.
While a surging gold price is on hold as the world adjusts to a Trump presidency, all the factors that saw its price rise more than 50 per during his first term in office – trade disputes, fiscal deficits and geopolitical tensions – are almost certainly guaranteed the second time around.
Crypto mining ETF launches in Australia
Hedge fund manager Cosmos Asset Management has joined the crypto race, listing an exchange-traded fund loaded with crypto-mining and infrastructure companies. The ETF will give Australian investors the opportunity to gain exposure to the sector, without actually holding cryptocurrencies.
The ETF will be listed on Chi-X Australia as the Cosmos Global Digital Miners Access ETF (Chi-X: DIGA).
The fund will invest in 30 stocks, where at least 80 per cent of the revenue comes from digital currencies. This makes it possible for financial advisers to give advice on the financial product without having to worry about the lack of regulatory protection over holding cryptocurrency directly in a portfolio. The launch of DIGA means investors won’t have to hold cryptocurrencies directly but can still receive any upside potential from the cryptocurrency world.
The fund’s biggest holdings include companies in digital asset mining and infrastructure, such as Marathon Digital (NADSAQ: MARA), Riot Blockchain (NASDAQ: RIOT), Hive Blockchain Technologies (NASDAQ: HIVE) and Hut 8 Mining Corp (NASDAQ: HUT).
Chi-X Australia CEO, Vic Jokovic, says: “We are delighted to welcome the Cosmos Global Digital Miners Access ETF to Chi-X. Investor demand for access to advanced products and technologies, including cryptocurrencies, is constantly increasing and we expect this trend to continue as more products like DIGA become available.”
Cosmos Asset Management CEO, Dan Annan, says: “By offering a product on an Australian regulated exchange such as Chi-X, it means investors do not have to directly hold cryptocurrencies and, importantly, provides Australians with the ability to access the potential upside of the next wave of financial market innovation.”
The portfolio will track a custom Global Digital Miners Index run by Cosmos. This index has so far returned more than Bitcoin, up 1,257 per cent over the two years since its launch. Bitcoin is up 645 per cent over the same period. In comparison with the S&P/ASX 200, which has returned 21.3 per cent, the cryptocurrency ETFs are in a league of their own.
The launch comes amid a Senate report on cryptocurrency regulation. This month has seen a raft of global fund managers rushing to successfully create an investment vehicle that gives investors access to cryptocurrencies via the sharemarket. Earlier in the month, ETF Securities launched the ETF Securities Fintech and Blockchain ETF (ASX: FTEC), which holds up to 75 companies profiting from with blockchain technology.
While the recent launch is one step closer, the hurdle is regulation. A recommendation to allow financial advisers to give advice on cryptocurrencies, which could help to transform Australia into a leading digital economy, was not included in the Senate report. Until a regulatory framework and a measure of consumer protection for the sector is determined, ETFs like DIGA and FTEC are the next best thing.
