Australian investors looking for a regulated way to gain exposure to Bitcoin finally have their answer. The Monochrome Bitcoin ETF (IBTC) is set to launch on the Cboe Australia exchange tomorrow, marking a significant milestone for cryptocurrency adoption in the country.
This isn’t just any Bitcoin ETF. Unlike existing products in Australia, IBTC holds the digital currency directly. This is made possible by a new crypto asset licensing category introduced under Australian Financial Services (AFS) regulations in 2021. Monochrome assures investors that their Bitcoin holdings are securely stored offline in a dedicated custody solution meeting stringent institutional standards.
Previously, Australian investors had limited options. They could either invest in indirect Bitcoin ETFs or resort to offshore products, both lacking the investor protections offered by the new AFS licensing regime. IBTC, with its direct holdings structure, brings these crucial safeguards to the table.
Another distinguishing factor is in-kind redemption, a feature not available in US cash-settled Bitcoin ETFs. This allows investors to redeem their ETF shares for actual Bitcoin units.
Monochrome CEO Jeff Yew is optimistic about IBTC’s prospects, citing the growing popularity of indirect Bitcoin ETFs in Australia. He also confirmed plans for a directly held Ether ETF, catering to investor demand for the world’s second-largest cryptocurrency.
The Australian launch follows a similar move in Hong Kong, which saw four spot Bitcoin ETFs debut in April. However, the picture there has been mixed, with most ETFs experiencing net outflows except for Bosera’s offering. US Bitcoin ETFs, in comparison, have seen a net inflow of $13.9 billion, although offset by outflows from the Grayscale Bitcoin Trust.
Yew believes Australia’s strong cryptocurrency interest could translate into significant inflows for IBTC. He predicts net inflows ranging from $3 billion to $4 billion within the first three years, a bullish outlook for the country’s first directly held Bitcoin ETF.
With IBTC’s launch, Australian investors now have a more secure and regulated way to participate in the Bitcoin market. Whether this translates into the predicted inflows remains to be seen, but one thing is certain: the Australian crypto landscape just got a whole lot more interesting.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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