Advertisement
Coinbase to Custody Bitcoin for DigitalX’s New Australian ETF, Strengthening Crypto Services Down Under
- DigitalX has enlisted the support of global crypto business Coinbase to manage Bitcoins sold via the team’s ASX-listed BTC ETF.
- Coinbase is responsible for the custody of most BTC ETFs, including billion-dollar fund IBIT.
- Australia only has two Bitcoin ETFs available on the ASX, DigitalX’s BTXX and VanEck’s more popular VBTC.
Coinbase is amid a huge expansion effort, with the crypto exchange transforming from a trading platform into a multi-national Web3 business. The business has several high-profile projects in operation, including developing an L2 scaling solution for Ethereum (Base) and sinking its teeth into the Asia Pacific blockchain market.
Coinbase is also a major advocate of Bitcoin ETFs, and have demonstrated this support through custody for the majority of US Ether and BTC ETFs. The team is bringing this same service Down Under, with Australia’s newest spot Bitcoin ETF (BTXX) partnering up with Coinbase to manage its BTC holdings.
Related: HSBC Australia Says Crypto’s Popularity with Scammers is Reason for Recent Block
DigitalX Bitcoin ETF Launched Without Much Fanfare…For Now
DigitalX’s spot Bitcoin ETF went live over a fortnight ago, becoming just the second crypto fund available on the ASX.
The stock is yet to see a whole lot of volume, with most Aussies honing in on competitor VanEck’s product.
In general though, the appetite for crypto ETFs in Australia has been suppressed relative to the United States. However, the US’ increasing regulatory and political focus on blockchain tech is likely to bleed over to Aussie soils, which may boost consumer adoption of cryptocurrency.
Coinbase Becoming Too Powerful? Or Is This Growing Up?
The industry’s reliance on Coinbase is an interesting development, given the premise of the blockchain is…well…decentralisation.
Brian Armstrong’s company has risen to prominence over the past few years, becoming one of just a handful of publicly traded crypto-based businesses. Not everyone in the community is pleased about the potential monopoly – especially given the billions of dollars that the ETFs are likely to attract.
Related: Jersey City Pension Fund to Invest in Bitcoin ETFs, Mayor Says ‘Bitcoin Won’
Coinbase’s security track record is solid and for now, there’s no reason to necessarily worry. But the company’s dominance of ETF custody does bring into question the tension between mainstream adoption and the fundamental principles of blockchain technology (such as privacy, decentralisation and anti-monopolisation).
Author
Ben Knight
Ben Knight is a writer and editor from Melbourne with a passion for all things music and finance. He enjoys turning complex topics – especially the technical details of cryptocurrency – into digestible bites that anybody can understand. He acquired his Master’s in Writing, Editing and Publishing from RMIT in 2019 and has run his own creative writing business ever since.
