Monochrome Asset Management Set to Launch Australia’s First Spot Ether ETF

In a significant move for the Australian cryptocurrency market, Monochrome Asset Management is preparing to launch the country’s first spot Ethereum exchange-traded fund (ETF), known as IETH. This innovative product is set to begin trading on the Cboe exchange starting Monday, marking a new chapter in regulated crypto investment options for Australian investors.

A Milestone for Australian Investors

The launch of IETH follows Monochrome’s successful introduction of Australia’s first Bitcoin ETF in June, which was well-received under the new crypto licensing rules. The company hosted a private event in Sydney last week to celebrate the upcoming launch, gathering service providers, partners, and team members to discuss the significance of this new offering.

• Key Highlights of the IETH Launch:
  • First spot Ethereum ETF in Australia.
  • Trading begins on the Cboe exchange.
  • Aimed at broadening regulated crypto investment options.

Monochrome’s CEO, Jeff Yew, emphasized the importance of this launch, stating that it will provide retail investors with a regulated avenue to gain exposure to Ethereum, the second-largest cryptocurrency by market capitalization. This move is expected to attract a diverse range of investors looking to diversify their portfolios with crypto assets.

Unique Features of the IETH ETF

What sets Monochrome’s IETH apart from other ETFs is its dual-access fund structure. This allows investors to apply for and redeem their investments in both cash and in-kind forms. This flexibility is designed to cater to a wider range of investor preferences and strategies.

• Benefits of the Dual-Access Structure:
  • Cash and in-kind applications and redemptions.
  • Potential for greater tax benefits through a ‘bare trust’ arrangement.
  • Direct ownership implications for investors.

Yew explained that the ‘bare trust’ structure means that investors may be treated as if they directly own the Ethereum held within the ETF. This unique feature could lead to significant tax advantages, as actions taken by the trustee are considered those of the investors, potentially avoiding capital gains tax.

Context of the Launch

The introduction of the IETH ETF comes on the heels of a similar product launch in the United States, which has not garnered the same level of interest as spot Bitcoin ETFs. Monochrome aims to differentiate itself by offering a product that not only complies with Australian regulations but also provides tangible benefits to investors.

• Comparison with US Market:
  • US spot Ethereum ETFs have seen lower demand compared to Bitcoin counterparts.
  • Monochrome’s focus on tax efficiency and direct ownership could attract more Australian investors.

By filing the IETH product in September alongside its Responsible Entity partner, Vasco Trustees Limited, Monochrome is positioning itself as a leader in the Australian crypto investment landscape. The company’s commitment to providing regulated and compliant investment options reflects a growing trend towards mainstream acceptance of cryptocurrencies.