DCX Capital, a South African-based company that offers indexed crypto investment, are currently implementing a strategy to apply for the country’s first Bitcoin ETF (Exchange Traded Fund).
This news comes off the back of a podcast where co-founder, Earle Loxton, was a guest, and said that his company would be making an application to the Johannesburg Stock Exchange (JSE) for the ETF. Speaking with media outlet MoneyWeb, Loxton explained that the application will be made via Easy Equities, a popular trading and investment platform for South African investors.
Easy Equities owns a controlling stake in DCX Capital, having completed this acquisition in October 2020, and offers the company’s EC10 index fund; an index of the top ten cryptocurrencies by marketcap, and is weighted according to their percentage of market capitalisation. The fund is represented by the EC10 token, and algorithmically tracks crypto prices in real time, adjusting the weighting of each asset accordingly.
Offering this index, or even just Bitcoin, as an ETF on the regulated JSE would be monumental for the adoption of cryptoassets not only locally, but internationally too. It would mean that portfolio managers and brokers could allocate portions of their investments to Bitcoin and digital assets, and would drive significant trading volume.
While many investors question the point of an ETF when they can simply purchase via a cryptocurrency exchange, risk-averse investors and institutions sitting on considerable assets under management would only feel comfortable investing in a regulated environment where they feel safe, such as the JSE.
The likelihood of a digital asset ETF being approved in South Africa is unclear, and arguably hangs in the balance, with numerous FSCA personnel and other regulators casting doubt on the possibility of favourable regulation. For the sake of digital asset adoption in the country and the continent, this will be an intriguing story to watch.