Australia is gearing up for the launch of its first-ever Bitcoin exchange-traded fund (ETF) that directly holds the digital asset. The Monochrome Bitcoin ETF (IBTC) is scheduled to start trading on the Cboe Australia exchange on Tuesday, June 4.
While Australia already has several exchange-traded products offering exposure to Bitcoin, Monochrome Asset Management is making history by becoming the first to receive approval under a new crypto asset licensing category established under Australian Financial Services (AFS) licensing rules in 2021. This unique license allows the ETF to securely hold Bitcoin (BTC) directly. Monochrome has ensured that IBTC’s holdings are stored offline in a device disconnected from the internet, complying with Australian institutional custody regulatory standards.
Previously, Australian investors could only access Bitcoin indirectly through ETFs or offshore products, lacking the protections offered by the directly held crypto asset AFS licensing regime. Monochrome emphasizes that IBTC stands out as it enables in-kind redemption from investors, unlike its US counterparts that are cash-settled.
Jeff Yew, the CEO of Monochrome, anticipates a high level of interest in their ETF, given the growth of indirect Bitcoin ETF products in recent months. He also disclosed plans to develop and launch an Ether (ETH) ETF that would also hold the asset directly, along with exploring other opportunities within the digital asset sector to cater to investor demand.
The launch of IBTC in Australia closely follows the introduction of four spot Bitcoin ETFs in Hong Kong in late April. While the Hong Kong ETFs have seen net outflows, the US Bitcoin ETFs have attracted substantial inflows, with the Grayscale Bitcoin Trust experiencing significant outflows.
Yew believes that Australia’s crypto-friendly environment will drive significant net inflows into local spot Bitcoin ETFs, estimating between $3 billion to $4 billion within the first three years. As Australia continues to embrace cryptocurrency, the country is poised to become a significant player in the global digital asset market.
In related news, a crypto city guide to Sydney showcases the city’s growing importance as a hub for digital assets, highlighting its diverse offerings beyond just being a token bridge.