Monochrome, Cboe Australia to launch 'world's first' Ethereum ETF

Monochrome Asset Management is preparing to launch Australia's first spot Ethereum exchange-traded fund on Cboe following the asset's long-awaited approval in the US market.

The Monochrome Ethereum ETF (IETH) is scheduled to begin trading on Monday (Tuesday 10am AEDT) and is the largest Bitcoin ETF (IBTC) that has gained $15 million (US$10.1 million) since its launch in August 2023. ).

Although this is significantly less than the billions held in the US, the fund positions itself as the first in the world to offer physical Ethereum subscriptions and redemptions.

This is a feature that has the potential to improve tax efficiency, CEO Jeff Yu said. decryption In an exclusive interview.

Dual-access bare trust structure is designed to prevent capital gains tax events and allows long-term cryptocurrency participants to transfer their Ethereum to the corresponding Monochrome ETF without triggering legal and beneficial interest changes .

“'Bare Trust' means that your investment in the ETF will be treated as if you directly own Ethereum,” Yu explained.

In other words, this structure gives investors absolute rights to their allocated Ethereum, according to the fund's public statement. decryption.

This means that any action taken by the trustee will be treated as an action by the investor and no CGT event will be triggered on redemption or transfer unless beneficial ownership changes.

This structure is what Monochrome hopes will differentiate its products from their U.S. counterparts.

In January, the U.S. Securities and Exchange Commission approved 11 spot Bitcoin ETFs. Then, in May, nine Ethereum ETFs were approved, with billions of dollars flowing into the funds in the months that followed.

While the Australian market is unlikely to match these inflows, Monochrome is hoping to capitalize on increased investor interest this year.

“U.S. crypto ETFs, including Bitcoin ETFs, cannot be physically supported and do not operate in this time zone,” Yu said.

IETH tracks CME CF Ethereum Reference Rate – Asia Pacific variant. The management fee is 0.50%, reduced to 0.21% for certified advisors. This puts it within range of its US competitors, offering an average of 0.20% and 0.25%.

The ETF will also be available on most Australian securities platforms and will support transfers from cryptocurrency platforms, decentralized wallets and cold wallets.

Cryptocurrency financial services company BitGo and crypto exchange operator Gemini will provide custody services to IETH, while State Street Australia will act as the fund manager.