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Crypto/Blockchain | BetaShares ASX CRYP (ASX:CRYP) ETF Analysis

Updated: Nov 14, 2021


BetaShares ASX: CRYP ETF Review

The truth is, not every investor is comfortable holding cryptocurrencies. However, they want part of the action regardless. But how do they reap the benefits of the crypto market without investing directly in it?


Say Hello to CRYP!


CRYP Key Objective

CRYP guns to track the performance of an index (before expenses and fees) that provides exposure to global companies right at the top of the crypto economy. CRYP offers crypto investors focused exposure to top companies with material investments in crypto-assets or those involved in servicing crypto-asset markets.


CRYP Facts

  • CRYP is Australia's first crypto-focused ETF.

  • CRYP was launched by BetaShares on the Australian Securities Exchange. This announcement comes after the exchange has so far hesitated to adopt crypto-related exchanges, leading more local businesses to other crypto-compliant exchanges abroad over the last few months.

  • CRYP will not provide volatile exposure to cryptocurrencies in the crypto market. Instead, it provides a global digital asset exposure that spreads across businesses, including mining and exchanges.

  • CRYP aims to track the Bitwise Crypto Industry Innovators Index, underpinning another ETF listed on the NYSE.

  • CRYP funds will be administrated by Citigroup Pty Limited. The corporation will also serve as custodian to the ETF while KPMG will take care of all its audits.

  • CRYP has a net asset of $42,327,926

  • CRYP has about 3,800,000 Units Outstanding


BetaShares Chief Executive, Alex Vynokur, described the process that led to the eventual approval as lengthy. It is clear that modern-age investors are now making clear demands that suggest the inclusion of cryptocurrencies, and it only makes sense to include the ETF to provide investors with the exposure they crave.


The Details

Trading Information

  • ASX Code: CRYP

  • RESS Code: CRYP.AXW

  • Bloomberg Code: CRYP AU

  • Management Fee: 0.67%


Benefits of Investing in CRYP

BetaShares ETF with the ticket code "CRYP" is being found on the following benefits:

1. Crypto Exposure: Many local investors in Australia have been looking to explore their huge risk appetite with cryptocurrency ETFs. However, so far, they have only been met with disappointment and the need to move into other zones with their investment capital. However, with the new ASX: CRYP listing, investors can have the exposure they've always wanted to the biggest crypto-focused companies like Riot Blockchain and Coinbase. According to the Australian Financial Review, BetaShares first submitted its application to the Australian Securities Exchange in May to list a crypto ETF.

The ETF will provide the necessary exposure for crypto-inclined companies looking to track the Bitwise Crypto Industry Index after it has been received the required regulatory approval.

2. Crypto Volatility Shield: Cryptocurrencies most often prove to be too volatile for local Australian investors, but with an ETF, investors can afford to hold companies rather than crypto assets and, as such, largely dampen the risk that would otherwise come with direct crypto investments.

This is similar to the recently approved bitcoin-related ETF, Volt Equity, approved by the SEC in the United States and now traded on the New York Stock Exchange.

According to BetaShares, 85% of the index to be listed focuses on companies that either gain three-quarters of their revenue directly from the crypto markets or own three-quarters of their net assets in liquid crypto-asset holdings.

3. Investor Regulation and Protection: Investors can purchase cryptocurrency from a number of unregulated platforms and venues but at their own risk. The CRYP ETF, on the other hand, ensures a system of accountability, transparency, and protection. It safely ushers investors into crypto while fully considering the safety of their business, assets, and holdings.

The Australian Securities Exchange is there to make sure of that. Some crypto enthusiasts may remember that this is not BetaShares’ first attempt at a crypto-focused ETF. Sometime in 2018, BetaShares made public its intentions to launch a crypto-themed ETF with the ticker code BLOK, but it never happened. Partly because:

  • Investors were not fully ready for that shift

  • Regulations were not fully in place to protect prospective investors.



Why you should Consider BetaShares Crypto Innovators ETF (CRYP)

  • As BetaShares Crypto Innovators ETF makes its debut, here's why you should consider the ETF:

  • CRYP shows outstanding promise for an ETF. The new BetaShares ETF which debuted on the Australian Stock Exchange on November 4, 10:30am at $11.23 per unit skyrocketed to $8 million in volume within 15 minutes. Bloomberg data reveals that the ETF's trading volume pumped to $24.5 million by midday, and then shut up to $28 million in less than an hour. By day's end, investors had poured over $42 million into the index. That's a new record for ASX listed ETFs.

  • CRYP exposes you to leading global companies at the heart of cryptocurrency growth. The same exposure also helps you capitalize on opportunities with new rapidly emerging establishments. You will not only have access to companies whose balance sheets reflect figures of 75%+ in Crypto assets. You will also enjoy access to a list of diversified crypto-focused but versatile companies.

  • CRYP will track one of the biggest global crypto-asset managers, Bitwise Crypto Industry Innovators Index.

  • CRYP’s index will capture the full scope of the crypto ecosystem. This includes well-known cryptocurrency exchange platforms, Coinbase, Bitcoin mining institution, Riot Blockchain, and business intelligence company Microstrategy.


The Future: Will CRYP invest in Bitcoin?

The approval of the bitcoin-based ETF, Volt Equity, by the SEC in the United States has made a lot of Australians optimistic about their first crypto ETF, CRYP. Will CRYP evolve into a Bitcoin-backed ETF, or will another ETF arrive to provide that luxury? Only time can tell.


For now, it feels just right to celebrate the creation of a cryptocurrency-based ETF. It's a start in the adoption of cryptocurrencies in this continuously evolving digital asset space. It is certain that there may be more than a few other cryptocurrencies ETFs within the next few years, especially ETFs with bitcoin and ethereum backing.


BetaShares CEO Alex Vynokur expressed, "Following the successful launch of CRYP, we are looking forward to building out a range of ETFs providing Australian investors a broad range of exposures to the digital assets ecosystem, including the expected launch of the 1BTC and 1ETH ETFs, which will provide access to the performance of the spot prices of Bitcoin and Ethereum."


CRYP Companies of Interest

You can expect that the new cryptocurrency ETF will look to invest in companies that minimize the risk exposure of its investors. These include crypto mining industries, crypto trading platforms, and cryptocurrency exchanges, and those that perform other key services relating to cryptocurrencies.

Even as BetaShares looks to track an index of focused portfolio with a minimum of 30 of the leading cryptocurrency innovators and companies. It may also include some new, fast-rising companies working on cryptocurrency and Blockchain.


Top 10 Holdings by Weight

  1. Galaxy Digital Holdings LTD (12.3%)

  2. Silvergate Capital Corp (12.3%)

  3. Marathon Digital Holdings INC (12.0%)

  4. Coinbase Global INC (9.9%)

  5. MicroStrategy INC (9.1%)

  6. Riot Blockchain INC (5.3%)

  7. Voyager Digital LTD (4.7%)

  8. Hut 8 Mining Corp (4.2%)

  9. Canaan INC (3.5%)

  10. Hive Blockchain Technologies L (3.4%)


CRYP Regulations

An Australian Senate Committee including Ripple, Blockchain Australia, Swyftx, R3, and other renowned crypto institutions suggested 12 recommendations to regulate cryptocurrencies and digital assets. This included new regimes for market licencing for DCEs, tax discounts, altering counter-terrorism financing guidelines, changing anti-money laundering regulations to fit the cases in check.


The Australian Security Exchange commented that the new regulations needed to focus more on responsible conduct obligations, proper segregation of participants’ assets and private keys from the marketplace’s own assets, appropriate record keeping, maintaining policies and procedures to protect a participant’s assets from theft or loss, sufficiency of resources, due diligence on partners and participants, and Independent assurance.


The new regulations are all aimed at making Australia one of the biggest hubs for cryptocurrency in the years to come.The breakthrough in the United States with the Securities Exchange Commission only shows that the same feat is possible and just about ripe in Australia and other neighbouring countries.


Australia can take a cue from the United States and learn one or two things. The progress with CRYP can, in turn, pioneer a change in other countries like Canada, where regulations and approval for multiple BTC ETFs have not yet been cemented.


Is BetaShares Capable of CRYP Fund Management?

Apparently! BetaShares has been around for over a decade and, in that time, seen the funds under its management grow from $10 billion to over $20 billion. With necessary Australian Securities Exchange regulations, the administration of Citigroup Pty Limited, and the keen eyes of KPMG, it is safe to expect the fund manager to keep strengthening. BetaShares have proved that they are more than capable to help budding investors grow their portfolio and reach their financial goals. The Chief Executive Officer of BetaShares, Alex Vynokur, boldly expressed that since the launch of BetaShares' first product, the fund manager has established itself as a convincing leader in the Australian equities exchanged-traded funds industry.


This dominance is evident in the company's long-standing relationship with institutions in Australia and New Zealand. The company had even proceeded to further strengthen their ties by soaking their roots into New Zealand soil. A local office in the region will further increase its reach and appeal to Australian and New Zealand investors. Technically, more investors enjoy easy investment solutions and advice.


The Director of Adviser and Institutional Business, Thom Bentley, has more than three decades of experience handling institutional businesses and portfolios. His work with SmartShares, Nomura Asset Management, Remarkable Capital, and Macquarie and Scottish Widows most certainly equip him with all the knowledge he needs to handle a vast range of situations.


This is only a snapshot that BetaShares Global only employs the best hand. They don't just fill space because it needs to be filled or create a crypto ETF without being up to the task. They have a feel for exactly what needs to be done.


CRYP VS. other ETFs on ASX

How will CRYP interact with the rest of the ETFs listed on the Australian Securities Exchange? You can expect that many investors will rush on the ETF within the first few weeks. The ETF has already set a new ASX ETF record with a volume of over $42 million within the first trading day. It's only expected and natural. Investors have waited for several years to see this happen, and for now, the CRYP will be the only Crypto-stock ETF. So when they finally get a chance to explore it, other ETFs may lose special attention.


How CRYP Affects the View of Australia to the rest of the world

Remember a time when the world powers were defined by their firepower. Now, times have changed. World powers are being decided by how fast they're willing to adopt and implement new cutting-edge technological development. The United States has only arrived at the party a little earlier than Australia, and although BetaShares had been pushing for a better crypto-based ETF since March, it's only been approved recently.


Yes, Australia is still a long way from attaining a Bitcoin-based crypto ETF, but a step in the right direction certainly goes a long way. Countries like Brazil and Canada have already approved and released ETFs back by Bitcoin and more. Perhaps this will also be the next fight of BetaShares in months to come.


The job of the Australian Securities Exchange is to find ways to regulate the ETF better consistently. Joseph Longo, Chairman of the Australian Securities and Investment Commission, can take a cue from other countries, take a deep look into how they're regulating their crypto-based ETF interactions and see if they can apply the same techniques.


It took more than six months to get the approval for a crypto-based ETF from the Australian Securities Exchange. It may take even more time to get a bitcoin-backed ETF in the years to come, but it's nothing that BetaShares can’t handle! Reports reveal that BetaShares are already pushing, but only so much has been revealed to the public. VanEck has also lodged a submission with the ASX in hopes to list its crypto-backed ETF.


The bulk of the approval task falls with the ASX creating effective regulatory measures to safeguard investors and their investments in a Bitcoin-backed ETF space.


Australian Securities and Investment Commission’s currently adios a formal position on crypto-asset ETFs. This will help ASX and decide whether they list the products.


According to Mr Vynokur, it's not about speculating the value of Bitcoin, Ripple, or Ethereum. At least, it doesn't have to be.


Top Benefits of CRYP to Investors

  • Low-risk investor participation in Crypto markets: Unsupervised, unstructured entries into cryptocurrency in unregulated venues may spell the worst for high-capital investors. Hence, the new CRYP ETF provides them with a way to absorb whatever volatile blow the markets may deal.

  • CRYP means structure, protection, transparency, and accountability. It's all an investor can ask for and more.

  • Growth: If the Australian Securities Exchange can accept a crypto-backed ETF now, it means we might not have to wait that long before they ensure the necessary regulations for a bitcoin, ethereum, or ripple-backed ETF. More acceptance of cryptocurrency-related businesses will dictate whether foreign investors would be interested in listing in the countries index.

  • Accessibility: Australian investors can begin to enjoy the ease of access to crypto-related products and offerings. There would be no need to look outside the borders for an exchange that supports their needs.


Main Disadvantages of CRYP to Investors

  • Skewed mainly towards Bitcoin mining and holding companies

  • Not diversified enough to other projects in the industry

  • "High" management fee (0.67%) relative to other ETFs



Summary

CRYP is an attractive, low cost for it's asset class, highly transparent crypto ETF that will surely gain a name in months to come. It already showed so much promise by setting a new trading volume record for the exchange 15 minutes into its debut. The coin gives exposure to the top 30 Australian publicly traded companies and will pass on any dividends to all its shareholders. It is well suited for an investor that's looking to take advantage of the growth in the crypto world without investing directly in cryptocurrency assets. Crypto experts envisage a significant spring in fund and index returns after the crypto ETF has been launched and officially listed on the Australian Securities Exchange.


Australian Investors are excited. The world at large is excited about the launch, and one thing is for sure: the launch of this ETF will be the first of many in the region and beyond.


I personally will be watching this space closely and will wait to see other Crypto/Blockchain ETF before making my decision to buy. My hope is there will be one with a lower management fee and more diversified.


Frequently Asked Questions about Betashares ASX CRYP ETF

What will be BetaShares' management fee?

The Betashares ASX CRYP ETF charges a fee of 0.67% per annum. This means that on an investment of $100,000, you have to pay $670 a year. The same goes with a capital of $1,000,000, you will only need to pay $6700 in a full year.


What is the ASX CRYP dividend yield?

TBA.


What companies will make ASX CRYP ETF's main Constituents?

CRYP ETF will focus on pure-play crypto companies with a diversified but main crypto business and revenue stream.

Some of the most notable companies on the ASX CRYP ETF watch will include Coinbase, Riot Blockchain, and MicroStrategy. The index may also include fast-paced Australian businesses that are well-positioned for rapid growth.


Disclaimer: Although CRYP aims to dampen the high risk associated with the crypto market, it still carries potential risk to investors. Crypto-assets are highly speculative and investors with significant exposure and capital should expect some potential risk regardless. Investment in CRYP should be made when and only when an investor fully understands the risks of the companies they're investing in. Determine your risk tolerance, or consult with a financial advisor before making an investment in CRYP.

Also, note that an investment in CRYP is not the same as investing directly into cryptocurrency assets. Do not expect CRYP to directly track the price movements of cryptocurrencies.

I don't hold any CRYP don't plan to in the near future.

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