Australia is gearing up for the launch of its first-ever spot Bitcoin exchange-traded fund (ETF) on Tuesday, June 4. The Monochrome Bitcoin ETF (IBTC) will make its debut on the Cboe Australia exchange, offering direct exposure to Bitcoin for investors.
While Australia already has various exchange-traded products linked to Bitcoin, Monochrome Asset Management stands out as the first to receive approval under the new crypto asset licensing category established under Australian Financial Services (AFS) licensing rules in 2021. This unique licensing allows the ETF to directly hold Bitcoin, unlike other indirect options available to Australian investors.
The IBTC ETF ensures the security of its holdings by storing them offline in a device disconnected from the internet. Additionally, the crypto custody solution employed by Monochrome meets the stringent regulatory standards set for Australian institutional custody.
Unlike similar ETFs in the United States that are cash-based, the IBTC ETF permits in-kind redemption from investors. Monochrome CEO Jeff Yew expressed confidence in the strong interest the firm’s ETF will attract, given the growing popularity of indirect Bitcoin ETF products in recent months.
Yew also revealed plans to launch an Ether (ETH) ETF in the future, emphasizing the firm’s commitment to meeting investor demand within the digital asset sector. The launch of the IBTC ETF in Australia follows closely on the heels of four spot Bitcoin ETFs introduced in Hong Kong at the end of April.
While the Hong Kong ETFs have experienced net outflows since their launch, the U.S. Bitcoin ETFs have seen a significant inflow of funds. Yew believes Australia’s crypto-friendly environment will drive substantial net inflows of $3 billion to $4 billion into local spot Bitcoin ETFs within the first three years.
As Australia continues to embrace the world of cryptocurrencies, the country’s financial landscape is poised for further growth and innovation in the digital asset sector.