- Monochrome’s Ethereum ETF (IETH) launches, offering Australia’s first ETH subscriptions.
- IETH offers tax efficiency with a bare-bones trust structure and competitive rates.
Monochrome Asset Management will debut the first Ethereum in Australia [ETH] exchange-traded fund (ETF) on Cboe Australia, marking a significant step in the country’s cryptocurrency investment landscape.
Building on the success of its Bitcoin [BTC] ETF (IBTC), launched in August 2023 – which has already attracted $15 million in assets – Monochrome’s new Ether ETF (IETH) aims to provide Australian investors with direct exposure to ETH.
For those who don’t know: the asset manager on September 5 submitted an application hoping to get approval by the end of the month.
Fortunately, following a quick approval process, unlike recent regulatory moves in the US, IETH trading will begin on October 14.
How Does Monochrome’s Ethereum ETF Differ From US?
Although modest compared to US funds with billions in investments, the Australian fund stands out globally by offering in-kind Ethereum subscriptions and refunds.
Jeff Yew, CEO of Monochrome Asset Management, provided further insight into this and highlighted a unique feature of the IETH in tax efficiency in an exclusive interview with a publication.
He explained that the fund’s dual-access “bare trust” structure is designed to avoid capital gains tax events, providing a strategic advantage for long-term Ethereum holders.
This structure allows investors to transfer their Ethereum to the ETF without a shift in legal and beneficial ownership, potentially increasing the tax benefits of in-kind subscriptions and redemptions.
Taxus added,
“A bare trust means that your investment in the ETF can be treated as if you directly own the Ethereum.”
In fact, when IBTC gained momentum with its ETF-in-kind subscription model, Yew said:
“We’re starting to see an interesting pattern with our Bitcoin ETF; people are moving their holdings from crypto exchanges to the ETF; that’s actually where we’re seeing the biggest growth.”
That said, recent US ETF data shows contrasting trends: as of October 11 Bitcoin ETFs experienced significant inflows, with an added value of $253.6 million Ethereum ETFs recorded a small outflow of $0.1 million.
Despite these contrasting trends, industry giants like BlackRock and Fidelity remain optimistic about Ethereum’s potential.
Challenges ahead
While the Australian market is unlikely to replicate such high inflows, Monochrome is looking to capitalize on growing local interest in crypto investing, hoping to expand its presence as investor enthusiasm continues to grow this year.
“US crypto ETFs cannot be backed in kind, including Bitcoin ETFs, and they are not operated in this time zone.”
In conclusion, the Monochrome Ethereum ETF (IETH) would provide Australian investors with broad access through major brokerage platforms, supporting crypto exchanges and wallet transfers.
With a fee of 0.5%, reduced to 0.21% for accredited advisors, it closely matches the US market rate of 0.20%-0.25%.
Therefore, positioned for growth, IETH is well prepared to respond to any resurgence in market demand.