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Coinbase Eyes Australia’s Pension Fund Sector, Move Won’t ‘Cannibalize’ ETF Players

May 16, 2024

Coinbase is developing a service to specifically cater to the pension fund sector. This move doesn’t intend to ‘cannibalize’ the ETF players. People from the company view this opportunity as a ‘rising tide.’

Institutional interest with respect to crypto is notching up. According to the exchange’s Asia-Pacific Managing Director, John O’Loghlen, the interest is “big enough” for a company like his to come up with a self-managed portal to cater to the demand. He elaborated,

“Self-managed super funds might just make a single allocation and set it and forget it. We are working on an offering to service those clients really well on a one-off basis - to have them trade with us and stay with us.”

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According to official taxation data, self-run Australian pensions have more than $660 million invested into crypto. The number has remained flat over the past few months, and is yet to reclaim its 2021 peak. Nevertheless, when zoomed out further, the current figure marks a significant improvement from December 2019’s $131 million.

In self-managed funds, Bitcoin is usually the most commonly held crypto asset. In fact, data from BTC Markets pointed out that BTC comprises 3/5th of the total holdings. Treading on the cautious path, funds seldom experiment and diversify coins.  

Macro State of Affairs

ETFs are expected to roll out in Australia in the months to come. Several asset managers including VanEck and BetaShares have filed applications. In fact, the former has been in pursuit of a launch since 2021. It was the first fund manager that worked with the regulator and ASX on the nitty-gritty related to the mechanics. VanEck re-submitted its Bitcoin ETF application to the ASX in February. The first batch of applications lying on the table will likely be approved by the regulator before the end of the year.

As far as the macro picture is concerned, digital asset investment products registered inflows for the first time in nearly five weeks. Regionally, America had the upper hand and registered positive flows worth $135 million. Australia’s numbers were comparatively fragile, for it registered an inflow of merely $0.7 million. In fact, among all nations tracked by CoinShares, Australia has the lowest assets under management. The tides can be expected to reverse after the launch of ETFs and Coinbase’s service.

Source: CoinShares

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