Australia Introduces First Spot Ethereum ETF on Tuesday

TLDR

• Australia’s first spot Ethereum ETF launches on Tuesday
• Monochrome is launching the ETF, following their Bitcoin ETF in August
• The ETF will allow both cash and in-kind redemptions
• It will debut at 10:00 local time under the ticker IETH
• This follows a trend of spot crypto ETFs launching globally

Monochrome, an Australian crypto investment firm, is set to launch the country’s first spot Ethereum exchange-traded fund (ETF) on Tuesday, October 15, 2024.

This new investment vehicle, named the Monochrome Ethereum ETF (IETH), will debut at 10:00 local time, marking a significant milestone in Australia’s cryptocurrency investment landscape.

This launch comes on the heels of Monochrome’s successful introduction of a spot Bitcoin ETF in August. As of October 10, the Bitcoin ETF held 165 Bitcoin, valued at just over $10 million.

The new Ethereum ETF aims to provide investors with similar exposure to the second-largest cryptocurrency by market capitalization.

One notable feature of the Monochrome Ethereum ETF is its flexibility in terms of investment and redemption. Like the spot crypto ETFs in Hong Kong, IETH will allow both cash and in-kind applications and redemptions.

This means investors can buy into and cash out of the fund using either traditional currency or Ethereum itself, offering greater versatility for different types of investors.

The introduction of this ETF in Australia follows a global trend of countries approving and launching spot cryptocurrency ETFs.

This movement gained significant momentum after the United States approved its first spot Bitcoin ETFs in January 2024. Since then, several countries have followed suit, although the scale of these funds outside the U.S. has been notably smaller.

For context, as of October 10, Hong Kong’s spot Bitcoin and Ethereum ETFs held net assets of $262.97 million and $35.07 million, respectively.

In comparison, U.S.-listed ETFs held Bitcoin worth $58.66 billion and Ethereum worth $6.74 billion, according to data from SoSoValue. These figures highlight the substantial lead that U.S. crypto ETFs maintain in terms of assets under management.

The launch of Australia’s first Ethereum ETF comes at a time when other countries are also considering similar moves.

For instance, recent reports suggest that South Korea’s Financial Services Commission is contemplating allowing crypto ETFs, indicating a growing global interest in regulated cryptocurrency investment products.

The introduction of spot crypto ETFs in various markets aims to provide investors with a regulated and potentially more secure way to gain exposure to digital assets.

These investment vehicles allow individuals and institutions to invest in cryptocurrencies without the need to directly own or manage the underlying assets, which can be technically challenging and come with security risks.

For Monochrome, the launch of the Ethereum ETF represents an expansion of their crypto investment offerings.

The firm has already established a presence in the market with its Bitcoin ETF, and this new product allows them to cater to investors interested in Ethereum, which has gained significant attention due to its smart contract capabilities and role in the decentralized finance (DeFi) ecosystem.