Sebastian Sinclair

<div id="highlights-block_62eb1e33419ce" class="highlights">
 <ul>
 <li>Betashares&#8217; metaverse ETF will attempt to track the Bloomberg Metaverse Select Index which, in turn, tracks 32 metaverse-focused companies</li>
 <li>Betashares joins the likes of other providers, including ProShares and Global X, as it seeks to capitalize on the potential growth of virtual worlds</li>
 </ul>
 
</div>



Australian provider of exchange-traded funds (ETFs) Betashares said Wednesday it has launched the country&#8217;s first metaverse-themed product on the Australian Securities Exchange (ASX).



The BetaShares Metaverse ETF (MTAV) listing provides exposure to a portfolio of global companies involved in the building, development and operations circling the metaverse, Betashares said in a statement.



MTAV will attempt to track the Bloomberg Metaverse Select Index by offering exposure to a portfolio of 32 companies. Those companies include the likes of Roblox, NVIDIA and Meta Platforms whose focus centers on generating a &#8220;meaningful amount of their revenues&#8221; from metaverse-related activities.



Metaverses, or digital worlds, refer to&nbsp;spaces at the intersection of virtual reality, gaming, artificial intelligence, advertising, as well as digital currencies and tokens.



Meta, formerly Facebook, reported a&nbsp;second-quarter loss&nbsp;of <a href="https://cms.blockworks.co/meta-metaverse-unit-has-lost-5-7b-this-year/" target="_blank" rel="noreferrer noopener">$2.8 billion</a> via the social media giant’s metaverse division Reality Labs. Still, CEO Mark Zuckerberg remains upbeat on the long-term prospects for metaverse gaming and endevours.



“As the range of technologies underpinning the [metaverse] evolves and user growth continues, this secular trend is expected to revolutionise the way we engage with sport, live music and other ways of staying connected,&#8221; BetaShares&nbsp;CEO Mr Alex Vynokur said in the statement. 



“While still in the early stages of evolution, the [metaverse] has the potential to be one of the biggest secular growth trends of the coming decades.&#8221;



<h2 class="wp-block-heading">Bullish in a bear market</h2>



Betashares joins the likes of other providers, including <a href="https://cms.blockworks.co/proshares-metaverse-etf-begins-trading/" target="_blank" rel="noreferrer noopener">ProShares</a> and <a href="https://cms.blockworks.co/global-x-latest-etf-issuer-to-test-out-the-metaverse/" target="_blank" rel="noreferrer noopener">Global X</a>, as it seeks to capitalize on the potential growth of virtual worlds with an estimated <a href="https://www.bloomberg.com/professional/blog/metaverse-may-be-800-billion-market-next-tech-platform/" target="_blank" rel="noreferrer noopener">$800 billion</a> in annual revenue by 2024. 



ProShares&#8217; metaverse ETF, VERS, is down 10% since its March launch while Global X&#8217;s fund, VR, has dropped 7% since it debuted in late April. For scale, the tech-heavy NASDAQ 100 has fallen almost 20% this year.



In any case, Betashares&#8217; move into the metaverse comes as Australia listed its first spot bitcoin and ether ETFs back in May by issuer 21Shares. The US, by comparison, is yet to list its own spot bitcoin ETF much to the chagrin of market participants. The US has listed multiple futures-based bitcoin ETFs.



Despite projected revenue for the metaverse, market conditions continue to plague the beleagured sector which include nonfungible tokens (NFTs). 



According to data by NFT gaming platform Balthazar, which analyzed four of the industry&#8217;s top NFT marketplaces OpenSea, Magic Eden, LooksRare and Solanart, total sales volume for July stood at $676 million — over US$6 billion lower than January, which recorded roughly $7 billion in sales.



Despite market headwinds, Betashares said it remained bullish on the promise of the metaverse claiming those brands attempting to stay connected with their customers will have to &#8220;increasingly invest considerable resources towards their &#8220;metaverse strategy.&#8221;



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Betashares Launches Australia’s First Metaverse ETF on ASX

Ben Strack

<div id="highlights-block_625dc22cb8cc6" class="highlights">
 <ul>
 <li>Though Osprey Funds intends to eventually convert its bitcoin trust to an ETF, the company’s CEO told Blockworks, “We’ve seen no light at the end of the tunnel”</li>
 <li>Gemini executive calls Teucrium bitcoin futures decision the “precursor” to agency’s spot bitcoin ETF go-head</li>
 </ul>
 
</div>



When — or if — the SEC will sign off on a spot bitcoin ETF is anyone’s guess, but that isn’t stopping hopeful industry participants from eagerly speculating.



Industry watchers <a href="https://cms.blockworks.co/when-will-the-sec-approve-a-spot-bitcoin-etf/" target="_blank" rel="noreferrer noopener">weighed in last November</a> and again <a href="https://cms.blockworks.co/will-bidens-executive-order-speed-up-spot-bitcoin-etf-approval/" target="_blank" rel="noreferrer noopener">last month</a> after President Biden’s executive order urged government agencies to study digital assets.



The SEC earlier this month <a href="https://cms.blockworks.co/sec-approves-bitcoin-futures-etf-filed-under-the-33-act/" target="_blank" rel="noreferrer noopener">approved a bitcoin futures ETF</a> filed by fund group Teucrium under the Securities Act of 1933 — the law under which spot bitcoin ETFs have been filed.&nbsp;



Following the development, other firm executives weighed in on the timeline for spot bitcoin ETF approval during the <a href="https://cms.blockworks.co/crypto-and-tradfi-collide-at-miami-etf-conference/" target="_blank" rel="noreferrer noopener">Exchange ETF conference</a> in Miami Beach last week.&nbsp;



Osprey Funds CEO Greg King called the Teucrium approval “a bit of a head-scratcher,” as the agency previously had only given the go-ahead to bitcoin futures ETFs filed under the Investment Company Act of 1940.&nbsp;



“I was pretty bearish that a spot bitcoin ETF would get approved in the Gensler administration once the futures-based ETF got done with ProShares,” King told Blockworks. “I’m rethinking that.”



Akin to crypto asset manager Grayscale Investments, which is aiming to convert its Grayscale Bitcoin Bitcoin Trust (GBTC) to an ETF, Osprey Funds would like to port <a href="https://ospreyfunds.io/products/obtc/" target="_blank" rel="noreferrer noopener">its Bitcoin Trust</a> (OBTC) in the same manner. The firm has not yet filed to do so, however, as King said he doesn’t expect Grayscale to get approval. The agency is set to rule on <a href="https://cms.blockworks.co/grayscale-ceo-spot-bitcoin-etf-approval-is-the-next-natural-step-for-sec/" target="_blank" rel="noreferrer noopener">Grayscale’s proposal</a> in July.



“I think we’ll go another cycle on it,” he said. “Whether that’s another year, I’m not sure.”



The SEC has continuously cited concerns around the potential for market manipulation, which King said is “kind of unsolvable” until all bitcoin trading flows through regulated US exchanges.



“We’ve held off because we’ve seen no light at the end of the tunnel,” he said. “We maintain the dialogue with outside counsel and the SEC behind the scenes, but there’s no reason to formally file until you feel that the chances have improved significantly.”



Dave Abner, global head of business development at crypto custodian Gemini, dubbed the Teucrium approval a “precursor” to regulators greenlighting a spot product.



“Taking that step in different investor protections is a huge signal, in my mind, from the SEC that they are preparing to take this next step,” he said.&nbsp;



Meanwhile Simeon Hyman, head of ProShares’ investment strategy group, declined to speculate on when the SEC could permit such a product, instead laying out the broader investment case for a bitcoin futures ETF.&nbsp;



ProShares was the first US fund group to launch a bitcoin futures ETF in October, days before Valkyrie Investments. The ETF took in about $1 billion in assets during its first day of trading.



Though some industry participants have <a href="https://cms.blockworks.co/what-does-demand-for-bitcoin-futures-etfs-look-like-in-2022/" target="_blank" rel="noreferrer noopener">compared such products unfavorably</a> to a spot bitcoin ETF, Hyman said the futures market has more liquidity than spot trading, adding that roll costs — or rolling over a short-term contract into a longer-dated one — are shrinking.



“We think it’s a pretty robust solution, and to us, it’s more important than trying to read the tea leaves and think about when spot might be available,” Hyman told Blockworks.



Greg Friedman, Fidelity’s head of ETF management and strategy, did not share a guess of when the SEC could move to permit a spot bitcoin ETF. Though he called the Teucrium acceptance “interesting,” he noted it was just “another approval.”&nbsp;



Regulators <a href="https://www.sec.gov/rules/sro/cboebzx/2022/34-94080.pdf" target="_blank" rel="noreferrer noopener">denied</a> the fund group’s Wise Origin Bitcoin Trust in January.



“It’s a new industry; it’s a new space,” Friedman said. “They are protecting and doing what they’re supposed to be doing, so it’s hard to predict what is the last straw.”



Chris Matta, president of 3iQ’s US business, said the SEC is likely waiting on more regulatory oversight of exchanges. He predicted a spot bitcoin ETF to hit the market in the second half of 2023 or 2024, adding that he expects an ether futures ETF to come first.



During the conference, MicroStrategy CEO Michael Saylor said though the approval of a spot bitcoin ETF could be a year or two away, he thinks there’s “a more than 50% chance” that Grayscale has “the inside track” and gains approval first.



Grayscale CEO Michael Sonnenshein <a href="https://cms.blockworks.co/sec-approves-bitcoin-futures-etf-filed-under-the-33-act/" target="_blank" rel="noreferrer noopener">said earlier this month</a> the Teucrium decision “significantly weakened” the SEC’s stance against a spot bitcoin ETF. The executive <a href="https://cms.blockworks.co/grayscale-ceo-spot-bitcoin-etf-approval-is-the-next-natural-step-for-sec/" target="_blank" rel="noreferrer noopener">doubled down</a> on remarks that “all options would be on the table” if the SEC denied the proposal, including suing the agency.



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Crypto Execs ‘Read the Tea Leaves’ on Spot Bitcoin ETF Approval

<div id="highlights-block_625890c0e5a8b" class="highlights">
 <ul>
 <li>Crypto-focused panels included executives from Grayscale Investments, MicroStrategy, 21Shares, Nasdaq and Valkyrie Investments</li>
 <li>The conference will become even more crypto-centric within three years, a Gemini executive said</li>
 </ul>
 
</div>



Some of the world’s largest asset managers, with little to no interest in crypto, shared the stage with prominent digital asset natives during this week’s Exchange ETF conference in Miami.&nbsp;



The event followed the swarms of bitcoiners — and piggybacking proponents of other cryptocurrencies — that flocked to the streets, clubs and waterways of Miami for <a href="https://b.tc/conference/" target="_blank" rel="noreferrer noopener">Bitcoin 2022</a>.



Pippa Malmgren, a tech entrepreneur and economist, kicked off the conference by calling blue-chip Bored Ape Yacht Club NFTs a “revolution in finance.”&nbsp;



She likened Web3 to a “Windows update,” saying the growth of the metaverse will force traditional financial titans to pay attention.



“You’re just going to be in it — whether you like it or not — because everything you work with is going to get upgraded into that space,” Malmgren said. “It’s a very different creative process that you engage in when you enter these spaces, and that is where we’re going in the world of finance.”



Michael Sonnenshein, chief executive of Grayscale Investments, spoke about the company&#8217;s proposed conversion of its Grayscale Bitcoin Trust (GBTC) to an ETF.



The leader of the largest crypto asset manager — with more than $35 billion in assets under management — <a href="https://cms.blockworks.co/grayscale-ceo-spot-bitcoin-etf-approval-is-the-next-natural-step-for-sec/" target="_blank" rel="noreferrer noopener">doubled down</a> on remarks that “all options would be on the table” if the SEC denied the proposal, including suing the agency.



MicroStrategy CEO Michael Saylor — speaking with Frank Holmes, executive chairman of HIVE Blockchain Technologies — meanwhile, said the US government’s move to regulate digital assets is <a href="https://cms.blockworks.co/michael-saylor-bullish-on-promise-of-crypto-regulation/" target="_blank" rel="noreferrer noopener">“a green light” for the crypto economy</a>. MicroStrategy, the biggest global corporate buyer of bitcoin, now holds about $4 billion of bitcoin.



Valkyrie Chief Investment Officer Steven McClurg and Dave LaValle, Grayscale’s head of ETFs, made their own case for the value of digital assets.



Asked by an attendee why investors should purchase a bitcoin ETF when they can already own the cryptocurrency outright, LaValle said an ETF takes some of the uncertainty or “extraneous education” of owning crypto out of the process.



McClurg added that while it’s important for individuals to own their own crypto, such an investment vehicle is key for professionals to bring exposure to clients.&nbsp;&nbsp;



“We are in a room with a bunch of financial advisors, and if your clients own the coin directly, you can’t get paid,” McClurg said. “The best wrapper for you to put your clients in something like this is either a [separately managed account] or an ETF, because it’s easy.”



<h3 class="wp-block-heading">Off the stage</h3>



More than 2,200 people attended, including nearly 1,000 financial advisers and institutional investors, according to Matt Hougan, chief investment officer of crypto-focused Bitwise Asset Management and a conference co-founder.



ETF providers, index providers, exchanges, trading firms and service providers were among the event’s 124 sponsors, including “a significant number of crypto market participants,” Hougan said.



The booths of the likes of crypto-focused Grayscale, Valkyrie, Bitwise, Gemini and Osprey surrounded the larger, traditional asset managers in one of the Fontainebleau hotel’s largest rooms.



<div class="wp-block-image"><figure class="aligncenter size-large"><img loading="lazy" decoding="async" width="1024" height="576" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/04/Exchange-ETF-conference-1024x576.jpg" alt="exchange ETF conference Miami" class="wp-image-20136" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/04/Exchange-ETF-conference-1024x576.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/04/Exchange-ETF-conference-1024x576.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/04/Exchange-ETF-conference-1024x576.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/04/Exchange-ETF-conference-1024x576.jpg?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2022/04/Exchange-ETF-conference-1024x576.jpg?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2022/04/Exchange-ETF-conference-1024x576.jpg?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2022/04/Exchange-ETF-conference-1024x576.jpg?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2022/04/Exchange-ETF-conference-1024x576.jpg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/04/Exchange-ETF-conference-1024x576.jpg?w=50 50w, https://blockworks-co.imgix.net/wp-content/uploads/2022/04/Exchange-ETF-conference-1024x576.jpg?w=1600 1600w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>Company booths were set up inside the Fontainebleau hotel in Miami | Source: Ben Strack for Blockworks</figcaption></figure></div>



Next to ARK Invest, which focuses on disruptive innovation, was Vanguard, for example.



A Vanguard spokesperson told Blockworks in January that “the risks of investing in cryptocurrencies are high, and the investment case is weak.”



Financial services titan Fidelity Investments announced during the conference that the crypto economy and metaverse ETFs it <a href="https://cms.blockworks.co/fidelity-plots-crypto-etfs/" target="_blank" rel="noreferrer noopener">had filed for in January</a> are set to launch on April 21.



“These are obviously two topics that are hot and of interest to our clients, and we want to be able to solve their needs,” Greg Friedman, Fidelity’s head of ETF management and strategy, told Blockworks. “Crypto is just another asset class.”



The ETF event’s outdoor oceanside lunch was sponsored by 21Shares, the world’s largest issuer of crypto exchange-traded products and a firm hoping to launch a spot bitcoin ETF in the US with Ark Invest. The firm’s CEO, Hany Rashwan, joined Blockworks reporter Ben Strack on stage Wednesday as part of a panel with Jake Rapaport, Nasdaq’s head of digital asset index research.



The Exchange conference will be a crypto conference within three years, said Dave Abner, global head of business development at crypto exchange and custodian Gemini.



“There’s not that much to talk about with 5 basis point S&amp;P 500 ETFs anymore,” he told Blockworks. “[Crypto] is the stuff that’s interesting. These are the guys that are sponsoring the conference; money’s flowing in that direction.”



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