Welcome to the first edition of Crypto Down Under! 🤝 

Today, I'm going to talk about the revolution in money and finance that's happening right before our eyes. Let's get started. 💥 

Bitcoin is going mainstream

In case you haven't noticed, we are on the eve of a revolution. A revolution that will reshape bitcoin, digital assets, and the entire world of money and finance.  

In the next few weeks, perhaps even in the next few days, the first spot bitcoin ETF is likely to be approved in the US. Bloomberg Intelligence analysts estimate that there's a 90% chance of approval by 10 January. That doesn't mean approval is a foregone conclusion. ☝️ 

But the US regulator, the Securities and Exchange Commission (SEC), currently has 12 spot bitcoin ETF applications on the table. And the most prominent of the 12 applicants, Blackrock, the world's largest asset manager with $8.6 trillion under management, boasts a 99.8% success rate for its previous ETF applications. So even if the applications are delayed or rejected, at this stage approval is a question of when, not if. 

You're wondering what all the fuss is about and why a spot bitcoin ETF is important? 

Simply put, bitcoin has been a market for crypto natives, geeks, and weirdos. The spot bitcoin ETF is a game changer because it will pave the way for mass adoption. In the future, everyone will be in bitcoin, Wall Street, the guy next door, and your mom. 🤯 

But easy, tiger. Let's just take it one step at a time. 🤌 

Until now, buying bitcoin was a rather fiddly exercise that involved transferring some of your Pacific pesos to a cryptocurrency exchange. If you wanted to take your bitcoin off the exchange to avoid the threat of a cyberattack, you had to move it into a cold wallet, learn about private and public keys, and memorise a series of random words. And if you made a mistake, all was lost. It's like walking a tightrope over a ravine. It's not for everyone. (That's not to say it's not worth it! 😬 )

Lower barriers to bitcoin investing

The spot bitcoin ETF will be a breakthrough because ETFs are the safest way to access the financial markets. ETF is short for Exchange Traded Funds, which means they can be bought and sold on an exchange such as the Australian Securities Exchange (ASX). They are low-cost, tax-efficient, fully regulated and you don't even have to worry about how to store your bitcoin. The ETF provider will take care of that. All in all, the spot bitcoin ETF will remove all the technical and regulatory barriers to investing in bitcoin.

Think of the spot bitcoin ETF as the initial public offering (IPO) of bitcoin. It's like bitcoin offering shares to the public for the first time. And we all know that some IPOs can be wild. Think Airbnb, Meta, Uber. 

So why have I been talking about a spot bitcoin ETF all this time? 🤔 

Here’s the thing.

In the US, a bitcoin ETF has actually been around for more than two years. It was listed on the New York Stock Exchange (NYSE) in August 2021. But it was a bitcoin futures ETF. 

What's the difference? 

Simple. 👇️ 

A bitcoin futures ETF is linked to bitcoin futures contracts. These contracts allow users to bet on the price of bitcoin by agreeing to buy or sell bitcoin at a specific price on a specific date. They are typically used for speculative or hedging purposes.

In contrast, a spot bitcoin ETF holds bitcoin directly. In other words, when you buy a spot bitcoin ETF, the ETF provider actually buys and holds bitcoin for you. This type of exposure is more suitable for long-term buy-and-hold investors. 

One last thing before we close. ☝️ 

It's worth noting that the race for spot bitcoin ETFs is global. Asset managers around the world see a business opportunity and are scrambling to get a piece of this promising asset class. The first to market will have a significant advantage.

In Europe, the first spot bitcoin ETF has already been launched. Hong Kong, which is trying to position itself as the crypto hub of Asia, already allows institutional and sophisticated investors to invest in spot bitcoin ETFs and is considering opening them up to retail investors. And Australia has also joined the fray. 

Brisbane-based asset management firm Monochrome submitted an updated application for the Monochrome Bitcoin ETF (IBTC) in July. 

It all depends on when the regulators make a decision. But you may be able to buy an ASX-listed spot bitcoin ETF before US products are available. 

In next week's newsletter, I'll look at the potential impact of a spot bitcoin ETF on the price of bitcoin. Watch your inbox! 🤜 🤛 

Before you go, please help me get better:

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Thank you! 🤜 🤛