Monochrome to Launch Australia’s First Ethereum Spot ETF This Monday

Monochrome Asset Management is all set to introduce Australia’s first-ever spot Ethereum exchange-traded fund (ETF) on the Cboe exchange. This marks a significant milestone in the country’s growing digital asset landscape.

Moreover, Monochrome’s Bitcoin ETF (IBTC), which debuted successfully in August 2023, has gathered $15 million (US$10.1 million) in assets under management.

While the fund’s current asset base pales compared to the billions held by its American counterparts, Monochrome strategically positions IETH as the world’s first ETF to offer physical Ethereum subscriptions and redemptions, according to Monochrome CEO Jeff Yew, this unique feature could provide significant tax advantages for investors.

The dual-access bare trust structure of the ETF is tailored to reduce tax implications for capital gains. This allows long-term crypto investors to smoothly transfer their Ethereum holdings to the corresponding Monochrome ETF without altering the legal and beneficial ownership.

As detailed in the fund’s public disclosure statement, this structure unequivocally grants investors absolute entitlement to their allocated Ethereum.

Monochrome Differentiates IETH from its U.S. Counterparts

Monochrome is confident that this distinctive structure will differentiate IETH from its U.S. counterparts, which cannot provide in-kind support for their Bitcoin ETFs.

Furthermore, The U.S. Securities and Exchange Commission’s approval of 11 spot Bitcoin ETFs in January and nine Ethereum ETFs in May, followed by a surge in inflows into these funds, highlights the growing investor appetite for crypto ETFs.

While the Australian market is unlikely to replicate the astronomical inflows in the U.S., Monochrome is optimistic about leveraging the growing interest in digital assets.

IETH will track the CME CF Ether-Dollar Reference Rate – Asia Pacific Variant, with a competitive management fee of 0.50%, reduced to 0.21% for accredited advisors, placing it within the range of its U.S. competitors.

Nonetheless, The ETF will be readily accessible on most Australian brokerage platforms, facilitating transfers from crypto, decentralized, and cold wallets.

Crypto financial services firm BitGo and crypto exchange operator Gemini will provide custody services for IETH, ensuring secure asset storage, while State Street Australia will act as the fund administrator.