Australia is gearing up to launch its first-ever spot Bitcoin exchange-traded fund (ETF) that will directly hold the asset, with trading scheduled to begin as soon as markets open on Tuesday.
The Monochrome Bitcoin ETF (IBTC) is all set to debut on the Cboe Australia exchange on June 4. While Australia already offers various exchange-traded products providing exposure to Bitcoin, Monochrome Asset Management has secured approval as the first to operate under a new crypto asset licensing category introduced in 2021 under Australian Financial Services (AFS) licensing regulations. This unique license permits the ETF to directly hold Bitcoin (BTC). Monochrome has ensured that IBTC’s holdings are securely stored offline in a device disconnected from the internet, utilizing a crypto custody solution that adheres to Australian institutional custody regulatory standards.
Previously, Australian investors could only access ETFs indirectly holding Bitcoin or through offshore Bitcoin products, none of which benefited from the investor protection rules provided by the directly held crypto asset AFS licensing regime, according to Monochrome’s statement.
In contrast to their U.S. counterparts, which are cash-funded, the ETF allows for in-kind redemption from investors. Monochrome CEO Jeff Yew expressed optimism about the strong interest anticipated in the firm’s ETF, given the steady growth of indirect Bitcoin ETF products in recent months. He also confirmed plans to develop and launch an Ether (ETH) ETF that will similarly hold the asset directly, along with exploring other thematic opportunities within the digital asset sector to meet investor demand.
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. While three out of four of the Hong Kong ETFs have experienced cumulative net outflows since their launch, one exception is Bosera’s spot Bitcoin ETF. In comparison, U.S. Bitcoin ETFs have performed more positively, with a cumulative inflow of $13.9 billion offsetting $17.9 billion in outflows from the Grayscale Bitcoin Trust.
Yew highlighted Australia’s strong presence in the crypto space and predicted that local spot Bitcoin ETFs could potentially attract between $3 billion to $4 billion in net inflows within the initial three years.
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