Australia is preparing to launch its inaugural Bitcoin exchange-traded fund (ETF) that directly holds the digital asset. The Monochrome Bitcoin ETF (IBTC) is scheduled to commence trading on the Cboe Australia exchange on Tuesday, June 4.
While Australia already offers various exchange-traded products providing exposure to Bitcoin, Monochrome Asset Management has become the first to receive approval under a new licensing category for crypto assets established within the Australian Financial Services (AFS) licensing regulations of 2021. This unique approval allows the ETF to hold Bitcoin (BTC) directly.
Monochrome has ensured that IBTC’s holdings are securely stored offline on a device disconnected from the internet, utilizing a crypto custody solution that complies with Australian institutional custody standards.
Prior to IBTC, Australian investors were limited to ETFs that indirectly held Bitcoin or offshore Bitcoin products, lacking the protection afforded by the directly held crypto asset AFS licensing framework.
In contrast to U.S. counterparts that are cash-settled, IBTC permits in-kind redemption from investors. CEO Jeff Yew expressed confidence in the ETF’s potential, given the increasing popularity of indirect Bitcoin ETF products in recent months. Monochrome is also prepared to develop and launch an Ether (ETH) ETF that would hold the asset directly.
Yew mentioned that the firm is exploring various thematic 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 on April 30, with mixed results in terms of inflows.
Despite the challenges faced by some Hong Kong ETFs, U.S. Bitcoin ETFs have demonstrated strong performance, with significant inflows. Yew believes that Australia’s enthusiastic embrace of cryptocurrencies will lead to substantial net inflows of $3 billion to $4 billion for local spot Bitcoin ETFs within the first three years.
In related news, a comprehensive guide to Sydney as a cryptocurrency hub is also available for those interested in exploring the city’s growing digital asset ecosystem.