Australia is gearing up to launch its first-ever spot Bitcoin exchange-traded fund (ETF) that will directly hold the asset, with trading set to commence on Tuesday when markets open.
The debut of the Monochrome Bitcoin ETF (IBTC) is scheduled for June 4 on the Cboe Australia exchange. While Australia already offers various exchange-traded products providing exposure to Bitcoin, Monochrome Asset Management stands out as the first to receive approval under the new crypto asset licensing category introduced by Australian Financial Services (AFS) licensing rules in 2021.
This unique license enables the ETF to hold Bitcoin (BTC) directly, with Monochrome ensuring that IBTC’s holdings are securely stored offline on a device disconnected from the internet. The crypto custody solution employed by the company complies with the stringent regulatory standards for Australian institutional custody.
Prior to IBTC, Australian investors were limited to ETFs indirectly linked to Bitcoin or offshore Bitcoin products, lacking the protections afforded by the directly-held crypto asset AFS licensing regime, as stated by Monochrome in a press release.
Differing from counterparts in the United States that are cash-backed, the IBTC ETF allows for in-kind redemption from investors. Monochrome’s CEO, Jeff Yew, expressed confidence in the ETF’s potential, citing the growing interest in indirect Bitcoin ETF products and hinting at plans for an Ether (ETH) ETF that would also hold the asset directly.
Yew emphasized the firm’s readiness to explore various opportunities in the digital asset sector to cater to investor demand. The launch of IBTC follows closely on the heels of four spot Bitcoin ETFs introduced in Hong Kong at the end of April, with mixed performance in terms of net inflows.
While U.S. Bitcoin ETFs have seen substantial inflows, the Grayscale Bitcoin Trust experienced outflows. Yew remains optimistic about the prospects for local spot Bitcoin ETFs in Australia, projecting significant net inflows in the range of $3 billion to $4 billion within the initial three years.
With Australia being recognized as a crypto-friendly nation, the introduction of spot Bitcoin ETFs is expected to further bolster the country’s standing in the digital asset space. Discover more about the vibrant crypto scene in Sydney with Crypto City guide, showcasing the city’s role beyond being just a ‘token’ bridge.