Monochrome Asset Management is set to launch Australia’s first spot Ethereum exchange traded fund (ETF) on Cboe. Trading begins on Monday (10am AEDT on Tuesday) following long-awaited approval of Ethereum ETF in the US
The new ETF, named IETH, comes just two months after Monochrome launched its Bitcoin ETF (IBTC), which has attracted $15 million (US$10.1 million) in investments since August 2023.
While this number is modest compared to the billions held by US ETFs, IETH aims to stand out by offering unique features such as physical subscriptions and redemptions.
CEO Jeff Yu explained that this structure provides greater tax savings for investors. The ETF utilizes a dual-access bear trust structure to allow long-term holders of Ethereum to transfer their assets to IETH without triggering a capital gains tax event. “Bare trust means that an investment in an ETF can be treated as if it directly owns Ethereum,” Yu said.
This innovative approach ensures that actions taken by the ETF's trustee are considered investor actions and no capital gains tax is due upon redemption or transfer as long as ownership remains unchanged.
Although the Australian market is not expected to match the large inflows seen in the US following the approval of several Bitcoin and Ethereum ETFs, Monochrome remains optimistic about increased interest from investors this year. I'm watching.
IETH tracks the CME CF Ethereum Reference Rate – Asia Pacific variant and is subject to a management fee of 0.50%, which may be reduced to 0.21% for certified advisors. This makes it competitive within the US market, where fees for similar funds are typically between 0.20% and 0.25%.
The ETF is accessible on most Australian securities platforms and supports transfers from various crypto platforms, decentralized wallets and cold wallets. Custody services for IETH are provided by BitGo and Gemini, with State Street Australia acting as the fund manager.
Also read: Ethereum rebounds from $2,300 support after $561 million outflow
