Australia Launches Its First ETF Directly Holding Ether

Monochrome Asset Management has launched Australia’s inaugural exchange-traded fund (ETF) that directly holds Ether, marking a significant milestone in the Australian cryptocurrency investment landscape. As of October 15, the Monochrome Ethereum ETF (IETH) debuted on the Sydney-based equities exchange Cboe Australia, achieving assets under management totaling $176,600 (or 262,500 Australian dollars) by 2:00 PM local time, according to Cboe Australia.

The Monochrome Ethereum ETF comes with a management fee of 0.50% and offers in-kind applications and redemptions. This means investors can transact in either cash or Ether, making it the only dual-access spot Ether ETF available in Australia. The ETF is secured by reputable custodians: BitGo and Gemini handle the cryptocurrency custody, while State Street Australia serves as the fund administrator.

The launch of IETH follows the successful introduction of Monochrome’s Bitcoin ETF (IBTC) in June, which has garnered almost $10.7 million (approximately 16 million Australian dollars) in total assets. Jeff Yew, CEO of Monochrome Asset Management, commented on the growth trajectory of the Bitcoin ETF, noting that many clients are transitioning their cryptocurrency holdings from exchanges into the more structured environment of an ETF.

“Now more and more crypto that had been previously held on exchanges is now being funneled into a regular structure like an ETF,” Yew remarked last month in an interview with Cointelegraph.

Yew expressed confidence in the potential success of spot crypto ETFs in the Australian market, suggesting that it is on a unique trajectory compared to other regions. He stated, “Australia is on a very different trajectory with ETFs […] with a bigger pie to carve out,” indicating optimism about the expanding market for cryptocurrency investment products.

Comparison with Other ETFs

Australia’s first spot Bitcoin ETF was launched by VanEck in June, which currently boasts total net assets of approximately $35 million (or 52 million Australian dollars). This ETF’s performance, along with the newly launched IETH, illustrates a growing acceptance and integration of cryptocurrency investment vehicles in the region.

On a global scale, the United States leads the way in the crypto ETF market, with 11 spot Bitcoin funds trading domestically. Collectively, these funds have amassed $19.3 billion in assets under management so far this year, demonstrating the strong demand for such investment vehicles.

Significant Inflows on October 14

The date of October 14 is shaping up to be particularly noteworthy for ETF inflows, as preliminary data from Farside Investors indicates that funds have experienced a combined net inflow of $556 million. This surge underscores the increasing appetite for cryptocurrency investments and the role that ETFs are playing in making these assets more accessible to a broader audience.

The launch of the Monochrome Ethereum ETF marks a significant step forward for cryptocurrency investments in Australia, providing investors with a regulated and structured way to gain exposure to Ether. With competitive management fees, the ability to transact in both cash and Ether, and the backing of established custodians, this ETF has the potential to attract both institutional and retail investors alike.

As the market for cryptocurrency ETFs continues to grow, the success of IETH could pave the way for further innovation and development in the sector. The combination of regulatory approval, market demand, and the strategic positioning of products like the Monochrome Ethereum ETF sets the stage for a dynamic future in cryptocurrency investments in Australia.

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