Australia’s first Ethereum ETF to launch on 15th Oct 2024

Australia is set to launch its first spot Ethereum exchange-traded fund (ETF) through Monochrome Asset Management, following the successful debut of the country’s spot Bitcoin ETF in August. The Monochrome Ethereum ETF (IETH) will start trading at 10:00 AM AEDT on Tuesday, with the goal of capitalizing on growing interest in crypto ETFs worldwide. Although significantly smaller in scale compared to U.S. counterparts, the Australian crypto ETF market is gaining momentum with this latest offering.

Key points include:

• In-kind and cash redemptions: IETH will allow both cash and in-kind subscriptions, enabling greater flexibility for investors.
• Tax efficiency: The fund offers a “bare trust” structure, potentially allowing investors to transfer Ethereum without triggering capital gains tax (CGT).
• Global competition: While Australian ETFs trail behind U.S. ETFs, which hold billions in assets, IETH stands out for its dual-access and Asia Pacific timezone operations.

Monochrome CEO Jeff Yew emphasized the importance of the “bare trust” feature, stating, “A ‘bare trust’ means that your investment in the ETF may be treated as if you directly own the Ethereum,” allowing investors to transfer or redeem Ethereum without incurring CGT, provided the beneficial ownership remains unchanged.

IETH will track the CME CF Ether-Dollar Reference Rate – Asia Pacific Variant, offering a competitive management fee of 0.50%, reduced to 0.21% for accredited advisors. This puts it on par with U.S. Ethereum ETFs, which typically offer fees between 0.20% and 0.25%. Additionally, IETH will be available on major Australian brokerage platforms and support transfers from various crypto platforms, decentralized wallets, and cold wallets.

With BitGo and Gemini providing custody services, and State Street Australia serving as fund administrator, Monochrome is positioning itself as a leader in the Australian crypto ETF market, even as it faces stiff competition from global markets.