In a landmark move for the Australian financial landscape, Monochrome Asset Management has successfully launched the nation’s first exchange-traded fund (ETF) that directly holds Ether (ETH). The Monochrome Ethereum ETF (IETH) went live on October 15, 2024, on the Cboe Australia exchange, marking a significant milestone in the integration of cryptocurrency into traditional investment frameworks.
A Promising Start
By 2:00 PM local time, IETH had already garnered total net assets of approximately $176,600 (or 262,500 Australian dollars), showcasing strong initial interest among investors. This pioneering fund is particularly notable for its management fee of just 0.50%, making it an appealing option for those looking to invest in Ether without the complexities often associated with direct cryptocurrency purchases. Additionally, IETH offers in-kind applications and redemptions, enabling transactions in either cash or Ether, thus providing investors with flexibility in how they engage with the fund.
Custodians and Management
Monochrome has partnered with industry leaders BitGo and Gemini to serve as custodians for the ETF, while State Street Australia will take on the role of fund administrator. This robust custodial framework is designed to instill confidence among investors by ensuring that their assets are securely managed.
Jeff Yew, CEO of Monochrome Asset Management, expressed optimism about the future of spot crypto ETFs in Australia. In a recent interview with Cointelegraph, he noted that the firm’s previous success with its Monochrome Bitcoin ETF (IBTC)—which has amassed nearly $10.7 million (16 million Australian dollars) since its June launch—demonstrates a growing trend of institutional interest in regulated cryptocurrency investment products.
The Growing Crypto ETF Market
Yew pointed out that many clients are increasingly moving their crypto assets from exchanges into structured vehicles like ETFs, which offer more security and transparency. He stated, “Now more and more crypto that had been previously held on exchanges is now being funneled into a regular structure like an ETF.” This transition signals a shift in investor behavior as they seek safer alternatives for managing their cryptocurrency holdings.
Australia is catching up with the global trend of cryptocurrency ETFs, particularly in the wake of the United States’ lead in this space. The U.S. has seen the launch of 11 spot Bitcoin funds, accumulating a staggering $19.3 billion in assets under management in 2024 alone. Australia’s first spot Bitcoin ETF, launched by VanEck in June, currently holds around $35 million (52 million Australian dollars) in assets.
Market Outlook
The launch of the Monochrome Ethereum ETF aligns with a broader trend of increasing institutional acceptance of cryptocurrencies. As of October 14, 2024, there was a notable surge in ETF inflows, with preliminary data from Farside Investors reporting a joint net inflow of $556 million across various funds on that day.
Also Read: Ethereum’s (ETH) 6% Rally At Risk? 56% Drop In Holding Time Signals Potential Pullback Below $2,400
The introduction of IETH not only diversifies the investment options available to Australian investors but also signifies a growing recognition of Ether’s value in the digital asset ecosystem. With a dual-access spot Ether ETF now on the market, investors can explore new avenues for gaining exposure to cryptocurrency, marking a pivotal moment in Australia’s financial evolution.
As Monochrome Asset Management continues to innovate in the crypto ETF space, the future looks promising for Australian investors eager to participate in the digital economy through regulated and secure investment vehicles.
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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