TL;DR
- Monochrome Asset Management will launch Australia’s first Ethereum ETF, which will start trading on October 14, 2024.
- The bare trust structure will allow investors to avoid capital gains tax (CGT) events when transferring Ethereum to the ETF.
- Monochrome also offers a Bitcoin ETF since August 2023, which has accumulated $15 million in assets.
Monochrome Asset Management is preparing to make a significant mark in the Australian financial market with the launch of the country’s first exchange-traded fund (ETF) for Ethereum, which will begin trading on October 14, 2024.
This initiative comes after the long-awaited approval of the ETF in the U.S. market and promises to attract an increasingly interested audience in cryptocurrency investments.
The arrival of the Ethereum ETF, named IETH, comes amid growing demand for financial products that facilitate access to digital assets.
Monochrome’s ETF stands out by offering in-kind subscriptions and redemptions, a feature that could provide greater tax efficiency for investors.
According to Jeff Yew, the company’s CEO, this structure allows participants to transfer Ethereum to the fund without triggering a CGT event, which is a significant advantage for long-term cryptocurrency investors.
The bare trust structure means that investors retain absolute entitlement to their allocated Ethereum, allowing them to maintain an effective ownership position without the tax inconveniences that a conventional transaction would entail.
Monochrome has already launched its Bitcoin ETF (IBTC) in August 2023, which has managed to accumulate $15 million in assets. While this figure is modest compared to the billions managed by funds in the United States, the company is optimistic about its ability to capitalize on the growing interest of investors in the Australian market.
With the new Ethereum ETF, Monochrome hopes to attract more investors and diversify its product offerings at a time when interest in cryptocurrencies is surging.
A Step Forward in Cryptocurrency Regulation
The arrival of the IETH also signals a step forward in the regulation of cryptocurrency-related products in Australia, where oversight of these assets remains a topic of debate. While the United States has approved multiple cryptocurrency ETFs, regulation in Australia has been more cautious.
However, Monochrome’s ETF could pave the way for greater acceptance and development of similar products in the country. This will not only benefit investors but could also boost the local economy by fostering a more robust ecosystem for cryptocurrencies.
Additionally, the IETH will be based on the CME CF Ether-Dollar Reference Rate – Asia Pacific Variant, with a competitive management fee of 0.50%, which will be reduced to 0.21% for accredited advisers.
This places Monochrome’s ETF in a favorable position against its competitors, while also seeking to facilitate access to Ethereum through Australian brokerage platforms.
With custody services provided by BitGo and Gemini, as well as fund administration managed by State Street Australia, Monochrome is well-positioned to offer a solid and secure product.
This launch represents not only an opportunity for Australian investors, but it also marks a significant milestone in the evolution of cryptocurrency ETFs worldwide.
