Australia’s First Spot Bitcoin ETFs That Hold Bitcoin Directly To Go Live Tomorrow

Australia is primed to join the United States, Canada, and Hong Kong in offering investors exchange-traded funds (ETFs) that invest in and directly hold the world’s largest and oldest cryptocurrency, Bitcoin (BTC).

According to reports, the Monochrome Bitcoin ETF (IBTC) will start trading at markets open on the global listing exchange, Cboe Australia, on June 4 (Tuesday).

Spot Bitcoin ETF Bandwagon Heads To Australia

Australia-based Monochrome Asset Management will start trading on the Cboe Australia exchange on Tuesday. The firm’s spot Bitcoin ETF will trade under the ticker symbol IBTC with a sponsor fee of 0.98%.

Australia already has several exchange-traded products that give investors exposure to the flagship cryptocurrency. Still, Monochrome Asset Management was the first to secure approval under a new crypto asset licensing regime made under Australian Financial Services (AFS) licensing rules in 2021. 

Notably, the IBTC will be the first ETF to hold BTC directly in Australia and track the CME CF Bitcoin Reference Rate index. In other words, the ETF will expose investors to the spot BTC price in a regulated framework.

Monochrome indicated that the fund’s Bitcoin holdings are stored offline in a device not connected to the internet and with a crypto custody solution that satisfies “Australian institutional custody regulatory standards.”

“Before IBTC, Australian investors were only able to invest in ETFs that indirectly hold Bitcoin or through offshore Bitcoin products, both of which don’t benefit from the investor protection rules under the directly held crypto asset AFS licensing regime,” the company said in a statement.

Notably, ETFs in Australia will allow in-kind redemption from investors, unlike its counterparts in the U.S., which have a cash creation model. Monochrome Asset Management expects “strong interest” in his company’s spot ETF given the steady growth of indirect Bitcoin ETF offerings.

Demand For Spot Bitcoin ETFs

Monochrome applied for a BTC ETF in April 2024, and the quick approval underscores Australia’s regulatory agility in the rapidly evolving digital asset sector. Since the U.S. Securities and Exchange Commission (SEC) gave the groundbreaking go-ahead to spot Bitcoin ETFs in January 2024, jurisdictions like Hong Kong and Australia have signaled an openness to the investment vehicles.

By late April, Hong Kong had officially greenlighted the first cluster of Bitcoin and Ethereum exchange-traded funds, a first for the city as it seeks to become a global crypto hub. Australia’s largest stock exchange — the Australian Securities Exchange (ASX) — is also reportedly planning to approve its first batch of spot Bitcoin exchange-traded funds (ETFs) by the end of this year.

The gargantuan inflows into U.S.-based ETFs have provided the confidence to list the products in Australia and undoubtedly prove crypto assets are here to stay.