Australia is about to witness the debut of its first-ever Bitcoin exchange-traded fund (ETF) that directly holds the asset when the markets open on Tuesday. The Monochrome Bitcoin ETF (IBTC) will commence trading on the Cboe Australia exchange on June 4.
While Australia already offers various exchange-traded products providing exposure to Bitcoin, Monochrome Asset Management stands out as the pioneer to receive approval under a new crypto asset licensing category introduced in Australia’s Financial Services licensing rules for 2021. This unique license permits the ETF to directly hold Bitcoin (BTC). Monochrome assures that IBTC’s holdings are securely stored offline in a device disconnected from the internet, adhering to Australian institutional custody regulatory standards.
Prior to IBTC, Australian investors had limited options, only able to invest in ETFs indirectly holding Bitcoin or overseas Bitcoin products, lacking the investor protection provided by the directly held crypto asset AFS licensing regime.
In contrast to U.S. counterparts, the IBTC ETF allows in-kind redemption from investors, a feature that sets it apart. Monochrome’s CEO, Jeff Yew, anticipates significant interest in their ETF, considering the consistent rise of indirect Bitcoin ETF products in recent months. The firm is well-prepared to launch an Ether (ETH) ETF in the near future, which will also directly hold the asset.
Yew expressed readiness to explore other opportunities within the digital asset sector to meet investor demands, emphasizing Monochrome’s commitment to innovation. The launch of IBTC in Australia closely follows the introduction of four spot Bitcoin ETFs in Hong Kong in April, with mixed results in terms of net inflows.
While the U.S. Bitcoin ETFs have seen substantial inflows, the Hong Kong ETFs have faced challenges, except for one. Yew believes that Australia, being a crypto-friendly nation, has the potential to attract billions in net inflows within the first three years of local spot Bitcoin ETFs being operational.
In conclusion, the Australian market is poised for significant growth in the crypto sector, with Monochrome leading the way with its groundbreaking Bitcoin ETF offering.