Australia is gearing up for the launch of its first spot Bitcoin exchange-traded fund (ETF) that directly holds the asset, set to debut on the Cboe Australia exchange on Tuesday, June 4.
Monochrome Bitcoin ETF (IBTC) will kick off trading as soon as the markets open, marking a significant milestone in the country’s financial landscape. While Australia already boasts various exchange-traded products providing exposure to Bitcoin, Monochrome Asset Management stands out as the pioneer to secure approval under a novel crypto asset licensing category introduced by Australian Financial Services (AFS) licensing rules in 2021.
This newly obtained license permits the ETF to possess Bitcoin (BTC) outright. Monochrome has assured that IBTC’s holdings are securely stored offline in a device not connected to the internet, complying with the high standards of Australian institutional custody regulations.
In a recent statement, Monochrome highlighted the limitations Australian investors faced previously, as they were only able to access ETFs indirectly holding Bitcoin or offshore Bitcoin products, missing out on the protection provided by the directly held crypto asset AFS licensing regime.
Differing from its American counterparts that are cash-backed, the ETF enables in-kind redemption from investors. Monochrome’s CEO, Jeff Yew, expressed his confidence in the market’s receptivity towards their ETF, given the escalating demand for indirect Bitcoin ETF products. He also revealed plans to develop and launch an Ether (ETH) ETF, focusing on direct asset holding, in the near future.
Furthermore, Yew emphasized their exploration of additional thematic opportunities within the digital asset sector to cater to growing investor interests. The launch of IBTC in Australia follows closely on the heels of four spot Bitcoin ETFs in Hong Kong, with mixed results in terms of net inflows.
While U.S. Bitcoin ETFs have seen significant cumulative inflows, the Grayscale Bitcoin Trust experienced substantial outflows. Yew remains optimistic about the potential of local spot Bitcoin ETFs in Australia, projecting net inflows of $3 billion to $4 billion within the initial three years.
As Australia continues to embrace its crypto-friendly reputation, the launch of a spot Bitcoin ETF underlines the country’s evolving stance on digital assets, positioning itself as a key player in the global cryptocurrency market.