Coinbase is expanding its footprint in the global Bitcoin ETF market.
The leading cryptocurrency exchange is reinforcing its commitment to global spot Bitcoin exchange-traded funds (ETFs) by partnering as a custodian for an Australian Bitcoin ETF.
DigitalX, the issuer of the DigitalX Bitcoin ETF (BTXX), has chosen Coinbase as the custodian for its spot Bitcoin fund, as stated in the official BTXX fact sheet.
Launched on July 12, the DigitalX Bitcoin ETF aims to replicate Bitcoin’s performance by maintaining long-term BTC holdings.
On July 9, DigitalX announced it had received approval to list its spot Bitcoin ETF on the Australian Securities Exchange (ASX).
According to the BTXX fact sheet, “The fund is intended to be a passive holder of Bitcoin and will not buy and sell Bitcoin other than to facilitate redemptions and creation of Bitcoin interests.”
Coinbase, one of the largest cryptocurrency exchanges in the United States, has become a key player in the infrastructure for global spot Bitcoin ETFs.
Since its approval in the United States in January, Coinbase has become a partner and custodian for 10 spot Bitcoin ETFs and eight of the nine newly approved Ether ETFs.
Notable spot Bitcoin ETFs, including the Grayscale Bitcoin Trust ETF (GBTC) and BlackRock’s iShares Bitcoin Trust (IBIT), also use Coinbase as a Bitcoin custodian.
Coinbase, with a 12-year history of securing vast digital assets, touts its custody solution as industry-leading and essential for accessing the crypto economy.
While the company’s dominant position in retail and Bitcoin ETFs has raised concerns about potential hacking or government interference, others argue that the underlying Bitcoin assets of ETFs would remain accessible even in the event of Coinbase’s bankruptcy.
The global momentum for Bitcoin ETF approvals has influenced the Australian market. ASX introduced its first spot BTC ETF, the VanEck Bitcoin ETF (VBTC), on June 20, 2024.
The spot Bitcoin ETF allows Australians to invest in BTC through exposure to VanEck’s US equivalent. VBTC is structured as a feeder fund, investing in VanEck’s Bitcoin Trust (HODL), a US Bitcoin ETF listed on the Chicago Board Options Exchange (CBOE).
Unlike Grayscale or BlackRock, VanEck chose the Gemini exchange, founded by the Winklevoss twins, as its custodian instead of Coinbase.
Following its ASX listing on July 12, the DigitalX Bitcoin ETF became the second spot Bitcoin ETF approved on the stock exchange, after VanEck’s listing in June.
