Australia’s First Spot Ethereum ETF Launches, Drawing Modest Initial Interest

Monochrome Asset Management has introduced Australia’s first spot Ethereum exchange-traded fund (ETF), marking a significant milestone in the country’s cryptocurrency market. The Monochrome Ethereum ETF, trading under the ticker IETH, debuted on Cboe Australia on October 15, 2024, following the firm’s successful launch of a spot Bitcoin ETF in June.

By 2:00 PM local time on its first day of trading, IETH had amassed total net assets of approximately 262,500 Australian dollars ($176,600), indicating a cautious but positive reception from investors. The fund’s initial performance, while modest compared to similar launches in the United States and Hong Kong, represents a noteworthy step in Australia’s growing crypto investment landscape.

IETH offers several distinctive features that set it apart in the market:

1. Dual-access structure: Investors can transact using either cash or Ether, allowing for both traditional and crypto-native participation.
2. In-kind applications and redemptions: This feature enables investors to transfer Ethereum directly from various sources, including crypto exchanges, decentralized wallets, and cold storage.
3. Competitive management fee: At 0.50%, the fee structure positions IETH between its U.S. and Hong Kong counterparts.
4. Tax efficiency: The ETF structure eliminates capital gains tax implications for transfers, potentially offering tax advantages to investors.

BitGo and Gemini serve as crypto custodians for the fund, with State Street Australia acting as the fund administrator, ensuring robust security and operational support.

The launch of IETH follows the growing trend of cryptocurrency ETFs in Australia. Monochrome’s Bitcoin ETF (IBTC), launched earlier this year, has accumulated approximately 16 million Australian dollars in assets. Meanwhile, the VanEck Bitcoin ETF (VBTC) on the Australian Securities Exchange has attracted over 52 million Australian dollars, demonstrating a broader appetite for crypto-based investment products in the country.

This development comes as the global market for cryptocurrency ETFs continues to expand. In the United States, spot crypto ETFs have seen significant inflows since their approval in January 2024, with Bitcoin ETFs collectively managing over $58 billion in assets and Ethereum ETFs holding approximately $6.74 billion as of mid-October.

As Australia’s cryptocurrency ETF market matures, industry observers will be watching closely to see how IETH performs in the coming months and whether it can replicate the success seen in more established markets. The launch of this Ethereum ETF not only provides Australian investors with a regulated avenue to gain exposure to the world’s second-largest cryptocurrency but also signals the country’s growing role in the global digital asset ecosystem.