Could we see a crypto ETF on the JSE any time soon? It seems like it could be a while. Canada launched the first ETF in 1990, tracking the performance of the 35 largest stocks on the Toronto Stock Exchange, while it took the JSE a decade to introduce the Satrix Top 40.
The JSE maintains a cautious approach, having rejected applications for crypto ETFs from some South African asset managers. These rejections have been based on regulatory grey areas — particularly around the Collective Investment Schemes Control Act, which governs pooled investment funds in South Africa, and regulation 28, which sets limits on how pension funds can invest.
Last week, a Bloomberg ETF analyst did some digging into BlackRock’s top revenue-generating ETFs and discovered that the IBIT bitcoin ETF is now third among its more than 1,000 ETF funds. Not bad for a fund that is less than two years old. Clearly, there’s tremendous demand.
Crypto exchange traded products (ETPs) have been around for years. Sweden and other European countries rolled out crypto ETPs in 2015, and Canada set the precedent in 2021 with the first spot bitcoin ETF.
A multicrypto ETF would give institutions exposure to a broader slice of the crypto market
The US seems to be catching on and now looks ready to move beyond just bitcoin and ethereum (ETH) ETFs, depending on how the Securities & Exchange Commission rules. Last week, the US regulator approved a multicrypto ETF including bitcoin, ETH, XRP, solana (SOL), and cardano (ADA), but then announced it would further review the decision.
Will developments in the US be enough to spur the JSE and South African regulators into action?
A multicrypto ETF would give institutions exposure to a broader slice of the crypto market through a traditionally regulated channel. Grayscale and others have also filed for spot ETFs tied to dogecoin (DOGE), ADA, XRP, and SOL, which could be approved before year-end.
We look forward to the day when South African institutional and retail investors can also benefit from these ETPs.
A record high
Bitcoin reached a record high on Friday and then again on Monday (more than R2.2m/$122,800). Several factors are driving the rally. Large institutions, investment firms and corporations continue accumulating bitcoin through ETFs and direct purchases, creating sustained upward pressure. A significant $200m short squeeze also contributed to the price surge, forcing traders betting against bitcoin to buy back their positions, amplifying the upward momentum.
The market has subsequently cooled, which is likely to be attributed to investors taking profit. The key support level bitcoin reaches could signal where the market will go next.
De Wit is South Africa country manager at Luno
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