Monochrome confident as it files for Australia’s first ETF to hold Ether directly

Australian asset manager Monochrome Asset Management is confident of a “positive outcome” after filing for a spot Ether exchange-traded fund, the first in the country that holds the asset directly.

In a Sept. 5 announcement, the firm said it lodged an application to quote the Monochrome Ether exchange-traded fund (IETH) on Cboe Australia, with hopes to have it listed by the end of the month.

Speaking to Cointelegraph, Jeff Yew, CEO of Monochrome Asset Management, said he expects strong interest, with a few key elements helping to drive the success of his Ether ETF. 

Yew thinks the ETF in-kind subscription model, which allows investors to choose to invest with fiat or other digital assets could be popular with investors.

“We are starting to see an interesting pattern with our Bitcoin ETF; people are moving their custody points from crypto exchanges into the ETF; that’s actually where we are seeing the biggest growth from,” Yew said.

According to Monochrome’s update chart on its website, its Bitcoin ETF has over $7.6 million ($11.4 million Australian dollars) invested as of Sept. 5, though this has paled in comparison to US-listed spot Bitcoin ETFs and some competitors in Australia.

However, Yew commented that Australia has been “less restrictive” on crypto compared to other countries, so ETFs are “unplugging a stopgap” for the market to invest in a fully regulated product for the first time.

“Dozens and dozens of crypto exchanges have been offering services to retail investors and some professional investors for the better part of a decade, so there is already a lot of investment in crypto assets,” he said.

“Now more and more crypto that had been previously held on exchanges is now being funnelled into a regular structure like an ETF.” 

Overall, Yew thinks because of this, “Australia is on a very different trajectory with ETFs,” to the rest of the world,” with a “bigger pie to carve out.”

Another Australian ETF, the VanEck Bitcoin ETF (VBTC), launched on July 13 and provides exposure by investing in VanEck’s Bitcoin (BTC) Trust. It has fared better in terms of net holdings which stands at over $26 million ($40 million Australian dollars).

Global X 21 shares Bitcoin ETF, which invests in physical Bitcoin, has over $65 million ($98 million Australian Dollars) in assets under management.

Related: BlackRock’s Bitcoin ETF registers second-ever outflow of $13.5M

In comparison, among the top four Bitcoin ETFs in the US, BlackRock’s iShares Bitcoin Trust (IBIT) tops the charts and has had over $20 billion in inflows to date.

Fidelity Wise Origin Bitcoin Fund (FBTC), has nearly $10 billion. ARK 21Shares Bitcoin ETF (ARKB) and Bitwise Bitcoin ETF Trust (BITB), each have roughly $2 billion in net inflows to date.

Monochrome Asset Management’s Bitcoin ETF, which launched in June, was the first in Australia to receive approval under the 2021 Australian financial services license (AFSL) for a spot crypto ETF’s.

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