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Monochrome Launches First Australian Spot ETF to Directly Hold Ethereum
- Monochrome Asset Management has launched Australia’s first spot Ethereum ETF (IETH), on Cboe. Trading started Tuesday at 10 AM AEDT.
- This follows the launch of Monochrome’s Bitcoin ETF (IBTC) in August 2023, which raised AU$15 million.
- The ETF will be available on Australian brokerage platforms and support transfers from crypto platforms, decentralised wallets, and cold wallets, with BitGo and Gemini providing custody services.
Monochrome Asset Management, led by CEO Jeff Yew, has launched Australia’s first spot Ethereum exchange-traded fund (ETF) on the Chicago Board Options Exchange (CBOE —again, the Australian version), marking a significant milestone for the country’s cryptocurrency market.
The company held a private event in Sydney last week to mark the upcoming launch of the IETH fund.
Related: Monochrome Asset Management to Launch Ethereum ETF on Cboe Australia
And It’s Live
Trading of Monochrome’s Ethereum ETF (IETH) began on Tuesday at 10 AM AEDT.
Monochrome’s IETH ETF will track the CME CF Ether-Dollar Reference Rate (Asia Pacific Variant) and feature a management fee of 0.50%, with a reduced rate of 0.21% for accredited advisers. This makes its fees competitive with similar products in the US market, which typically offer rates between 0.20% and 0.25%.
This launch follows the success of Monochrome’s Bitcoin ETF (IBTC), which debuted in August 2023 and has since amassed AU$15 million. And yes —this is modest compared to the large sums held in US crypto ETFs. However, Monochrome’s focus is on its unique structure.
The company claims to offer the world’s first-in-kind Ethereum subscriptions and redemptions, a feature designed to provide tax advantages, as Yew told Decrypt in an exclusive interview.
The overall idea is that the investment you place in the ETF is treated as if you were owning the coin. This is called a bare trust, and it essentially means that any actions taken by the trustee are treated as actions of the investors, so no capital gain taxes are triggered upon redemption or transfer.
The ETF will be accessible to most Australian brokers and will support transfers from cryptocurrency platforms, decentralised wallets, and cold wallets. BitGo and Gemini will provide custody services, and State Street Australia will serve as the fund administrator.
Related: ABC Report: Aussies Targeted for Crypto Scams as “Easy Prey”
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Monochrome hopes this launch will position the fund as a significant player in the Australian crypto market. Monochrome has not responded to CNA’s requests for comments.
Updated the headline on 18 October 2024, to reflect that the Global X Ethereum ETF was launched in 2022. The Monochrome Ethereum ETF offers a dual-access bare trust structure, allowing direct transfer of Ethereum into the ETF without tax implications, aiming to provide a simpler and potentially more tax-efficient investment option.
In contrast, the Global X Ethereum ETF uses a traditional trust structure that grants investors direct entitlement to Ethereum held in custody, ensuring that the ETF’s value closely tracks the spot price of Ethereum.
Author
José Oramas
José is a journalist and translator with a keen interest in blockchain and cryptocurrencies.
