Australia is gearing up to launch its first-ever spot Bitcoin exchange-traded fund (ETF) that directly holds the asset, with trading set to commence when markets open on Tuesday.
The Monochrome Bitcoin ETF (IBTC) will debut on the Cboe Australia exchange on Tuesday, June 4. While Australia already offers various exchange-traded products linked to Bitcoin, Monochrome Asset Management has become the first to receive approval under a new crypto asset licensing category established within the Australian Financial Services (AFS) licensing regulations in 2021.
This unique license permits the ETF to directly hold Bitcoin (BTC). Monochrome has assured that IBTC’s holdings are securely stored offline in a non-internet-connected device, adhering to Australian institutional custody regulatory standards.
Up until now, Australian investors could only access ETFs that indirectly held Bitcoin or offshore Bitcoin products, neither of which benefited from the investor protection rules provided by the directly held crypto asset AFS licensing regime, as stated by Monochrome.
In contrast to similar products in the United States that are cash-based, IBTC allows investors to redeem in-kind. Monochrome’s CEO Jeff Yew expressed confidence in the strong interest expected in their ETF, considering the steady growth of indirect Bitcoin ETF products in recent times.
Yew also disclosed plans to develop and launch an Ether (ETH) ETF that would directly hold the asset, in addition to exploring other opportunities within the digital asset sector to cater to investor demand.
The launch of IBTC in Australia follows closely after the introduction of four spot Bitcoin ETFs in Hong Kong on April 30, with three out of four experiencing cumulative net outflows since their inception, except for Bosera’s spot Bitcoin ETF. On the other hand, U.S. Bitcoin ETFs have seen a cumulative inflow of $13.9 billion, offset by $17.9 billion in outflows from the Grayscale Bitcoin Trust.
Yew highlighted Australia’s strong interest in cryptocurrencies and predicted that local spot Bitcoin ETFs could attract between $3 billion to $4 billion in net inflows within the initial three years.
In a related development, Crypto City’s guide to Sydney showcases the city as more than just a ‘token’ bridge in the world of digital assets.