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Breaking: Australia’s First Bitcoin ETF Directly Holding BTC Goes Live on CBOE
- Several Spot Bitcoin ETFs were approved and listed in the US in January, breaking records with BlackRock’s IBIT amassing US$20 billion in five months.
- Hong Kong and London also listed Spot BTC and Ether ETFs; globally, ETF-held Bitcoin now totals 5% of the supply.
- Australia’s Monochrome launches IBTC, the first Australian ETF to directly hold Bitcoin, featuring in-kind subscriptions and redemptions.
Exchange-traded funds (ETFs) are a hot topic in crypto right now. January saw the approval and listing of several Spot Bitcoin ETFs in the US, and these funds have set records.
BlackRock’s IBIT is considered one of the fastest-growing ETFs in history – if not the fastest – receiving US$20 billion (AU$30 billion) in inflows in just under five months.
Then we saw the listing of Spot BTC and Ether ETFs in Hong Kong, and similar funds were listed in London. Overall, Bitcoin held via ETFs globally currently accounts for 5% of the total supply.
Meanwhile Australia, which had to date only one BTC ETF, has just got a new addition.
IBTC First Aussie ETF to Directly Hold BTC
Sydney-based Monochrome Asset Management has announced that trading will commence on 4 June for the first Australian ETF that directly holds Bitcoin. The fund called Monochrome Bitcoin ETF will be listed on the Cboe Australia exchange and trade under the ticker IBTC.
Related: OP_CAT Upgrade Could Elevate Bitcoin Beyond a Mere Store of Value, Adding New Features
The fund, which will have a management fee of 0.98% and a buy-sell spread of 0.2%, will be available to trade on most trading platforms and also be SMSF-compatible.
Monochrome said in a statement that unlike funds in the US and Canada, the fund can “take subscriptions and redemption in-kind from investors”. Hong Kong allows in-kind for “authorised participants” only, which are usually large institutional clients.
In-kind subscription allows investors to contribute assets directly to the ETF in exchange for shares in the fund, rather than paying cash.
In-kind redemption generally permits investors to redeem their shares in the ETF and receive assets directly from the fund, rather than receiving a cash equivalent.
Assets Stored Securely and Meet Australian Standards
The company said IBTC is the first and only Australian fund authorised “under the crypto-asset licensing category of the Australian Financial Services Licensing (AFSL) regime”.
In the past, investors could only invest in funds that held crypto assets indirectly. Now, BTC is securely stored onshore and offline, offering a more direct and secure investment option.
IBTC’s bitcoin holdings are stored completely offline in a secure device that is not connected to the Internet, under a regulated crypto asset custody solution that meets Australian institutional custody regulatory standards.
Monochrome
The fund is benchmarked against the CF Benchmarks Ltd CME CF Bitcoin Reference Rate Asia Pacific Variant (BRRAP).
Related: Cathie Wood’s ARK Invest Abandons Its Application for a Spot Ethereum ETF
BRRAP is a daily benchmark index that aggregates Bitcoin-USD trading data from major exchanges meeting specific criteria. It serves as the primary index for Bitcoin risk settlement synchronised daily at 1600 Hong Kong Time.
As previously reported, Australia is likely to see its first ASX Bitcoin ETFs later this year, with Van Eck and BetaShares expected to list.
Author
Aaron Feuerstein
Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.
