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Monochrome Asset Management, a leading crypto investment firm, is set to launch Australia’s first Ethereum spot exchange-traded fund (ETF) on the Cboe exchange. The new ETF, trading under the ticker IETH, will begin on Monday, Oct. or on Tuesday at 10 AM AEDT, according to a recent report from Decrypt.
This follows Monochrome’s successful launch of its Bitcoin ETF (IBTC) in August 2023, which has amassed $15 million (US$10.1 million) in assets.
What is the Monochrome Ethereum ETF?
The Monochrome Ethereum ETF (IETH) is designed to provide investors with a regulated and direct method to invest in Ethereum, the second-largest cryptocurrency by market capitalization.
IETH will track the CME CF Ether-Dollar Reference Rate – Asia Pacific Variant, offering investors a trusted and transparent benchmark for Ethereum’s price.
Monochrome’s ETF will also stand out from competitors due to its in-kind subscription and redemption process, allowing investors to transfer Ethereum into and out of the ETF without triggering a capital gains tax (CGT) event. This feature, known as the bare trust structure, enables long-term Ethereum holders to transfer their assets to the ETF while maintaining full ownership of their tokens.
As long as the legal and beneficial title of the Ethereum remains unchanged, no CGT will be triggered.
Unlike many other ETFs in the market, Monochrome's IETH is accessible to both retail and accredited investors. Accredited advisers will benefit from a reduced management fee of 0.21%, while standard investors will face a management fee of 0.50%—a rate that remains competitive with U.S.-based Ethereum ETFs.
Crypto Custody Services and Regulatory Approval
Monochrome has partnered with industry-leading providers to ensure the security and regulatory compliance of the ETF. Crypto financial services firm BitGo will act as the custody provider, ensuring the safekeeping of the Ethereum assets.
Meanwhile, Gemini, a prominent crypto exchange operator, will offer additional custody services. Fund administration will be handled by State Street Australia.
Monochrome’s Ethereum ETF launch follows a broader trend in global markets. In the U.S., the Securities and Exchange Commission (SEC) approved the first spot Bitcoin ETFs earlier this year, followed by several Ethereum ETFs. The US Bitcoin spot ETFs already saw $18.81 billion in total net inflows as of now.