Monochrome Asset Management is set to launch Australia’s first spot Ethereum exchange-traded fund (ETF) on Cboe. Trading begins on Monday (Tuesday at 10 AM AEDT), following a long-awaited approval for Ethereum ETFs in the U.S.
This new ETF, named IETH, comes just two months after Monochrome launched its Bitcoin ETF (IBTC), which has attracted $15 million (US$10.1 million) in investment since August 2023.
While this figure is modest compared to the billions held by U.S. ETFs, IETH aims to stand out by offering unique features, including in-kind subscriptions and redemptions.
CEO Jeff Yew explained that this structure could provide greater tax efficiency for investors. By utilizing a dual-access bare trust structure, the ETF allows long-term Ethereum holders to transfer their assets into IETH without triggering a capital gains tax event. “A bare trust means that your investment in the ETF may be treated as if you directly own the Ethereum,” Yew said.
This innovative approach ensures that actions taken by the ETF’s trustee are considered actions of the investor, thus preventing any capital gains tax upon redemption or transfer as long as the ownership remains unchanged.
While the Australian market is not expected to match the massive inflows seen in the U.S. following the approval of several Bitcoin and Ethereum ETFs, Monochrome is optimistic about the growing interest from investors this year.
IETH will track the CME CF Ether-Dollar Reference Rate – Asia Pacific Variant and will have a management fee of 0.50%, which can be reduced to 0.21% for accredited advisers. This places it competitively within the U.S. market, where similar funds typically charge between 0.20% and 0.25%.
The ETF will be accessible on most Australian brokerage platforms and will support transfers from various crypto platforms, decentralized wallets, and cold wallets. Custody services for IETH will be provided by BitGo and Gemini, with State Street Australia acting as the fund administrator.
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