June 5, 2024
Australia spot Bitcoin ETF
Bitcoin ETF

Australia Introduces First Spot ETF Directly Holding Bitcoin

Introduction of Monochrome Bitcoin ETF

Australia is set to launch its first spot Bitcoin exchange-traded fund (ETF), marking a significant milestone for the country’s financial markets. The Monochrome Bitcoin ETF (IBTC) will begin trading on the Cboe Australia exchange on Tuesday, June 4. This new financial product is designed to hold Bitcoin directly, providing investors with a unique opportunity to gain exposure to the cryptocurrency in a regulated environment.

New Crypto Asset Licensing Category

While Australia already offers several exchange-traded products related to Bitcoin, Monochrome Asset Management’s new ETF stands out as the first to receive approval under the updated crypto asset licensing category introduced in 2021. This category falls under Australian Financial Services (AFS) licensing rules, which aim to offer greater investor protection. According to Monochrome, the Bitcoin held by IBTC is stored offline, ensuring it meets Australian institutional custody regulatory standards.

Direct Holding and Investor Protection

Before the launch of IBTC, Australian investors could only invest in ETFs that held Bitcoin indirectly or through offshore products, which lacked the protections offered by the AFS licensing regime. Monochrome emphasized that the direct holding of Bitcoin sets a new standard for investor security and regulatory compliance. Monochrome CEO Jeff Yew highlighted the strong interest in the firm’s ETF, attributing it to the recent growth of indirect Bitcoin ETF products. Yew also confirmed that the company is prepared to develop and launch an Ether (ETH) ETF, which will similarly hold the asset directly.

Comparisons and Market Expectations

The launch of the Monochrome Bitcoin ETF in Australia follows closely behind the introduction of four spot Bitcoin ETFs in Hong Kong. However, the performance of these ETFs has been mixed, with three experiencing net outflows since their launch on April 30. In contrast, U.S. Bitcoin ETFs have seen better results, with significant cumulative inflows despite outflows from the Grayscale Bitcoin Trust. Yew expressed optimism about the future of spot Bitcoin ETFs in Australia, describing the country as “very crypto-heavy.” He anticipates that local spot Bitcoin ETFs could generate between $3 billion and $4 billion in net inflows within the first three years.

Futuristic Approach

The launch of Australia’s first spot Bitcoin ETF represents a pivotal moment for the nation’s financial sector. By holding Bitcoin directly, the Monochrome Bitcoin ETF offers a new level of investor protection and regulatory oversight, setting a precedent for future digital asset investments in Australia. As the market evolves, Monochrome Asset Management is poised to explore additional opportunities within the digital asset sector, catering to the growing demand from investors.

Image by wirestock on Freepik

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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