Australia is gearing up for the launch of its first-ever spot Bitcoin exchange-traded fund (ETF) that directly holds the cryptocurrency. The Monochrome Bitcoin ETF (IBTC) is scheduled to commence trading on the Cboe Australia exchange on Tuesday, June 4.
While Australia already offers various exchange-traded products providing exposure to Bitcoin, Monochrome Asset Management has secured approval as the pioneer in a new crypto asset licensing category established under Australian Financial Services (AFS) licensing regulations in 2021. This unique license enables the ETF to directly hold Bitcoin (BTC). Monochrome ensures that IBTC’s Bitcoin holdings are securely stored offline in a device disconnected from the internet, complying with Australian institutional custody regulatory standards.
Prior to IBTC, Australian investors could only access ETFs indirectly holding Bitcoin or through offshore Bitcoin products, lacking the protection afforded by the directly held crypto asset AFS licensing framework, as Monochrome pointed out in a recent statement.
Differing from its American counterparts that are cash-based, the ETF in Australia allows for in-kind redemption from investors. Monochrome’s CEO, Jeff Yew, expressed confidence in the strong interest anticipated for their ETF, considering the consistent growth of indirect Bitcoin ETF products in recent times. Yew also confirmed plans to develop and launch an Ether (ETH) ETF that will also directly hold the asset, with further exploration of thematic opportunities in the digital asset sector to cater to investor demands.
The launch of IBTC in Australia follows closely on the heels of the introduction of four spot Bitcoin ETFs in Hong Kong on April 30. Despite the Hong Kong ETFs experiencing cumulative net outflows, the U.S. Bitcoin ETFs have shown resilience, with significant inflows. Yew highlighted Australia’s crypto-friendly environment and predicted local spot Bitcoin ETFs to attract between $3 billion to $4 billion in net inflows within the initial three years.
As interest in cryptocurrencies continues to grow, Australia emerges as a significant player in the crypto space, paving the way for innovative investment opportunities.