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Monochrome Asset Management, a prominent Australian company, will launch Australia’s first spot Ethereum exchange-traded fund (ETF) on Tuesday.
Monochrome’s Ether ETF is distinctive from US ETFs as it is designed to eliminate changes in legal and beneficial ownership and allows both in-kind and cash redemptions.
This development came just two months after Monochrome launched its Bitcoin ETF (IBTC), which boasts over $10.1 million in net assets.
Monochrome’s Spot ETH ETF To Launch With Special Features
Monochrome Asset Management will launch its Ethereum-based ETF on Tuesday, the first spot ETH ETF in Australia. The Monochrome Ethereum ETF will trade with the ticker IETH and go live at 10:00 local time.
@MonochromeAsset is set to launch Australia’s first Ethereum spot ETF (IETH) on the CBOE.#Ethereum #ETFs #IETH #Australia #Cryptolenz #Crypto https://t.co/Gsvts1E3YO
— Cryptolenz (@CryptobuddyInfo) October 14, 2024
According to the company’s statement, the ETH ETF will trade on the CBOE exchange. Monochrome also revealed that its Ethereum-based ETF has distinctive features. Unlike US-based ETH ETFs, IETH is the first Ether ETF to allow cash and in-kind Ethereum subscriptions and redemptions.
The company’s CEO, Jeff Yew, mentioned that this distinctive structure will enhance tax efficiencies for investors. Moreover, Monochrome’s ETH ETF offers a dual-access bare trust structure that eliminates legal and beneficial ownership changes.
The product also parades another feature that prevents capital gains tax situations for its long-term holders.
The ETF’s innovative inclusion translates the ETF’s trustee’s actions as the same by the investors. This structure overrides capital gains tax during investors’ redemptions and transfers only if the ownership remains unchanged.
CEO Yew stated: “A bare trust means that your investment in the ETF may be treated as if you directly own the Ethereum. US crypto ETFs can’t be supported in kind, including Bitcoin ETFs, and they are not operated in this timezone.”
Monochrome Sets Its IETH With Innovative Structures To Compete With US ETFs
Monochrome believes IETH’s special features will differentiate the product from US-based ETFs. The company indicated investors could easily access its ETH ETF on most Australian brokerage platforms.
IETH will also support fund transfers from various sources, including decentralized wallets, cold storage wallets, and crypto platforms.
Monochrome set its IETH management fee competitively at a considerate rate. The product aligns with the CME CF Ether-Dollar Reference Rate.
IETH’s management fee is 0.5%, reduced to 0.21% for its accredited advisers. Meanwhile, most US ETFs operate with fee structures between 0.20% and 0.25%.
Monochrome’s IETH has State Street Australia as its fund administrator. Also, the ETF has attracted prominent market players such as Gemini and BitGo as its crypto custody.
The advent of IETH comes after Monochrome launched its spot Bitcoin ETF, IBTC, a few months ago. As of October 10, Monochrome’s IBTC has amassed about 165 BTC tokens worth over $10.1 million since its debut.
Meanwhile, the crypto ETF market in the US and Hong Kong continues to thrive, with investors pumping millions into the funds. According to data from SoSoValue, US spot Bitcoin ETFs record total net assets of $58.66 billion, while ETH ETFs hold $6.74 billion in net assets as of October 14.
Data for Hong Kong’s spot Bitcoin and Ethereum ETFs stand at $141.04 million and $14.98 million in net assets, respectively, as of October 14.