Australia is gearing up for the launch of its first spot Bitcoin exchange-traded fund (ETF), set to hit the market when trading opens on Tuesday. The Monochrome Bitcoin ETF (IBTC) will be available for trading on the Cboe Australia exchange starting June 4.
While Australia already offers various exchange-traded products providing exposure to Bitcoin, Monochrome Asset Management has achieved a significant milestone by obtaining approval for the new crypto asset licensing category established under Australian Financial Services (AFS) licensing rules in 2021. This unique status allows the ETF to directly hold Bitcoin (BTC). Monochrome ensures the security of IBTC’s holdings by storing them offline in a device disconnected from the internet, utilizing a crypto custody solution that complies with Australian institutional custody regulatory standards.
Prior to IBTC, Australian investors could only access ETFs indirectly holding Bitcoin or offshore Bitcoin products, which lacked the investor protection regulations present in the directly held crypto asset AFS licensing regime, as stated by Monochrome in a press release.
In contrast to U.S. ETFs that are cash-settled, IBTC permits in-kind redemption from investors. Monochrome’s CEO, Jeff Yew, expressed confidence in the market’s interest in their firm’s ETF, especially given the steady growth of indirect Bitcoin ETF products. Yew also revealed plans to develop and launch an Ether (ETH) ETF that will similarly directly hold the asset, in addition to exploring other opportunities within the digital asset sector to meet 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 three out of four Hong Kong ETFs experiencing cumulative net outflows post-launch, the U.S. Bitcoin ETFs have seen a more positive reception, with a total inflow of $13.9 billion, partially offset by $17.9 billion in outflows from the Grayscale Bitcoin Trust.
Yew highlighted Australia’s strong interest in cryptocurrencies, predicting that local spot Bitcoin ETFs could attract between $3 billion to $4 billion in net inflows within the initial three years. Australia’s thriving crypto scene is expected to continue growing, positioning the country as a key player in the digital asset market.
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