The VanEck Bitcoin ETF has become the first to trade on the Australian Stock Exchange (ASX), marking a significant milestone in the country's cryptocurrency market. The ETF will start with an initial funding of 985,000 AUD and will act as a feeder fund for the $647 million VanEck Bitcoin Trust operating in the United States.

The Australian market has been showing interest in Bitcoin ETFs, with Sydney-based DigitalX Ltd. and BetaShares Holdings Pty. preparing to list their ETF offerings on the ASX. Other crypto ETFs are already operating on CBOE Australia, with $90 million in assets under management.

The VanEck Bitcoin ETF's debut on the ASX comes after a strong performance in the US, where spot Bitcoin ETFs have been gaining popularity. However, the current Fed uncertainty has led to outflows from these ETFs over the past few trading sessions.

The Asia-Pacific region is also expected to see significant growth in virtual-asset ETFs, with a potential market size of over $3 billion in the next few years. Top banking institutions and major warehouses are on the cusp of approving some of the top Bitcoin ETFs, which could lead to increased institutional participation in the market.

Critics argue that the initial ETF allocations are largely driven by retail investors, with institutional participation limited to the basis "cash and carry" trade rather than net long positions. This implies that ETF flows are not "real," according to a note from Gautam Chhugani and Mahika Sapra to clients on Tuesday.