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Australia approves first Bitcoin spot ETF, boosting crypto adoption

Australia offers two exchange-traded products (ETPs) through Cboe Australia, granting investors exposure to the spot crypto market. However, these products did not directly hold Bitcoin

Shashank Bhardwaj
Published: Jun 4, 2024 03:46:11 PM IST
Updated: Jun 4, 2024 03:49:45 PM IST

Australia approves first Bitcoin spot ETF, boosting crypto adoptionImage: Shutterstock

Australia's Monochrome Asset Management launched its Monochrome Bitcoin ETF (IBTC) on the Cboe Australia exchange starting Tuesday, June 4, 2024.

Monochrome Asset Management stated that IBTC is Australia's first and only ETF to hold Bitcoin directly. The announcement highlighted that prior to IBTC, Australian investors were limited to ETFs with indirect Bitcoin exposure or offshore Bitcoin products, neither of which offered the investor protections provided by the directly held crypto asset Australian Financial Services Licensing (AFSL) regime.

Monochrome Asset Management initially filed for its IBTC ETF in April, capitalising on the growing global interest in spot Bitcoin ETFs. After receiving approval in August 2022, the fund will now provide investors with direct exposure to Bitcoin, Ethereum, and other crypto assets.

In recent years, several firms have introduced Bitcoin ETFs that indirectly hold BTC or gain exposure through offshore products. Notably, 21Shares, a prominent issuer of crypto exchange-traded products, has launched some of these offerings.

The firm stated that IBTC's holdings are stored offline, i.e. on a device that is not connected to the internet, and with a crypto custody solution that meets "Australian institutional custody regulatory standards."

Monochrome Asset Management's CEO, Jeff Yew, expects "strong interest" in their ETF, given the consistent growth of indirect Bitcoin ETF products in recent months. Yew also confirmed that the firm is prepared to launch an Ethereum ETF to hold the asset directly. Furthermore, he mentioned that the company is exploring other thematic opportunities within the digital asset sector to meet investor demand.

The launch of IBTC in Australia coincides with the recent introduction of four spot Bitcoin ETFs in Hong Kong on April 30. Despite this, three of four Hong Kong ETFs, except Bosera's spot Bitcoin ETF, have experienced cumulative net outflows.

In contrast, U.S. Bitcoin ETFs have seen a cumulative inflow of $13.9 billion, offset by $17.9 billion in outflows from the Grayscale Bitcoin Trust. Also, Jeff Yew believes Australia's strong crypto market will drive significant interest in local spot Bitcoin ETFs, predicting net inflows of $3 billion to $4 billion within the first three years.

The launch of IBTC in Australia follows the successful introduction of spot Bitcoin ETFs in the United States earlier this year. These ETFs have experienced considerable success, reflecting strong investor interest and confidence in Bitcoin.

Additionally, Bitcoin ETPs have debuted on the London Stock Exchange. Bitcoin Exchange-Traded Commodities (ETCs) have launched in Germany, further underscoring the global trend towards more accessible Bitcoin investment products.

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist.
Twitter: @bhardwajshash