Australia’s First Bitcoin ETF to Begin Trading on Exchange
Monochrome Asset Management, based in Australia, announced on June 2 that its Bitcoin exchange-traded fund (ETF), IBTC, will soon go live. This launch will mark the first spot Bitcoin ETF to be traded in Australia.
Monochrome stated that IBTC will start trading on the Cboe Australia exchange on Tuesday, June 4, with a management fee of 0.98%. The holdings of IBTC will be stored offline on a device disconnected from the internet to ensure maximum security.
Notably, IBTC is the first and only ETF in Australia that directly holds Bitcoin, offering advantages over previous options available to Australian investors. Prior to IBTC, Australian investors could only invest in ETFs indirectly holding Bitcoin or through offshore Bitcoin products, neither of which benefit from the investor protection rules under the directly held crypto asset Australian Financial Services Licensing (AFSL) licensing regime.
Monochrome Bitcoin ETF provides investors with exposure to Bitcoin within a regulated framework. Australia’s spot Bitcoin ETF tracks the “CME CF Bitcoin Reference Rate Index,” linking its performance directly to the spot price of Bitcoin.
Cboe Australia will be the first Australian exchange to list a Bitcoin ETF, surpassing the larger Australian Securities Exchange (ASX) in bringing such a product to the market.
This launch takes advantage of the increasing demand for spot Bitcoin ETFs following their regulatory approval in the US market on January 11, 2024. This approval resulted in a surge of investments from institutional and retail investors.
Australia is now positioned to offer secure and straightforward exposure to Bitcoin without the need for direct ownership. As a passive ETF, IBTC eliminates the technical challenges of purchasing actual Bitcoin while providing returns tied to Bitcoin’s price.
It is worth noting that Monochrome applied for a spot Bitcoin ETF to be listed on Cboe Australia. The asset manager met all requirements and ultimately obtained approval from the Australian Securities & Investments Commission (ASIC).
The expansion of spot Bitcoin ETFs into global regions continues since the US approved them in January 2024. Countries like Hong Kong and Australia have also expressed their willingness to allow these products. On April 15, Hong Kong approved the first batch of spot-based Bitcoin and Ether ETFs by asset managers Harvest Global Investments, China Asset Management (ChinaAMC), and a consortium of Bosera Asset Management and HashKey Capital. This was followed by WisdomTree receiving approval from the Financial Conduct Authority (FCA) to list its cryptocurrency exchange-traded products (ETPs), WisdomTree Physical Bitcoin (BTCW), and WisdomTree Physical Ethereum (ETHW), on the London Stock Exchange (LSE).
Australia’s entry of a spot Bitcoin ETF into the market signifies a broader acceptance of Bitcoin as an institutional asset class. Other countries are likely to follow suit, with major markets now offering spot Bitcoin ETFs. This regulated structure adds legitimacy and provides investors with a direct way to gain exposure to Bitcoin.
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