Australia is on the brink of launching its first-ever spot Bitcoin exchange-traded fund (ETF) that directly holds the asset, with trading set to commence on Tuesday when markets open.
The Monochrome Bitcoin ETF (IBTC) will debut on the Cboe Australia exchange on June 4, becoming the pioneer in the country to receive approval under a new crypto asset licensing category established by Australian Financial Services (AFS) licensing regulations in 2021. This unique licensing permits the ETF to possess Bitcoin (BTC) directly. Monochrome has ensured that IBTC’s holdings are securely stored offline in a device disconnected from the internet and with a crypto custody solution that complies with “Australian institutional custody regulatory standards.”
Previously, Australian investors could only access ETFs that indirectly held Bitcoin or through foreign Bitcoin products, which did not offer the same level of protection as the directly held crypto asset AFS licensing regime. Monochrome expressed the significance of this development in a statement.
In contrast to their counterparts in the United States, which are cash-based, the ETF in Australia allows for in-kind redemption from investors. Monochrome CEO Jeff Yew is optimistic about the interest in the firm’s ETF, considering the steady growth of indirect Bitcoin ETF products in recent times. He also revealed plans for an Ether (ETH) ETF, which will also directly hold the asset, demonstrating the firm’s readiness to meet investor demand within the digital asset sector.
The launch of IBTC in Australia follows closely after the introduction of four spot Bitcoin ETFs in Hong Kong on April 30, with three out of four experiencing cumulative net outflows since their inception. In contrast, U.S. Bitcoin ETFs have seen more positive results, accumulating a total inflow of $13.9 billion, despite $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 attract between $3 billion to $4 billion in net inflows within the initial three years. With the launch of IBTC, Australia is solidifying its position as a crypto-friendly nation, offering innovative investment opportunities in the digital asset realm.
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