Australia’s First Spot Bitcoin ETF Sets To Begin Trading On Exchange

On June 2, Monochrome Asset Management, based in Australia, revealed that its Bitcoin exchange-traded fund (ETF), IBTC, would go live soon. This launch will make IBTC the first spot Bitcoin ETF to be traded in Australia.

First Australia’s Spot Bitcoin ETF Holdings Will Be Stored Offline

Monochrome disclosed that its Bitcoin ETF (IBTC) will begin trading on the Cboe Australia exchange on Tuesday, June 4, with a management fee of 0.98%. The IBTC’s holdings will be stored offline in a device not connected to the internet to ensure maximum security.

Notable as the first and only ETF in Australia to hold Bitcoin directly, Monochrome highlighted the advantage of IBTC over previous options available to Australian investors.

Monochrome stated,

“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 Australian Financial Services Licensing (AFSL) licensing regime.”

Monochrome Bitcoin ETF provides investors exposure to Bitcoin within a regulated framework. Australia’s spot Bitcoin ETF tracks the “CME CF Bitcoin Reference Rate Index,” linking its performance directly to the spot price of Bitcoin.

Cboe Australia will be the first Australian exchange to list a Bitcoin ETF, surpassing the larger Australian Securities Exchange (ASX) in bringing such a product to market.

This launch capitalizes on the growing demand for spot Bitcoin ETFs following their regulatory approval in the US market on January 11, 2024. This led to an influx of investments from institutional and retail investors.

Australia is now poised to offer similar secure and straightforward exposure to Bitcoin without requiring direct ownership. As a passive ETF, IBTC eliminates the technical challenges of buying real Bitcoin while providing returns tied to Bitcoin’s price.

It could be recalled that Monochrome applied for a spot Bitcoin ETF to be listed on Cboe Australia. The asset manager exceeded all requirements and eventually secured approval from the Australian Securities Investments Commission (ASIC).

Spot Bitcoin ETFs Expands Across Global Regions

Since the US approved spot Bitcoin ETFs in January 2024, other countries like Hong Kong and Australia have also shown willingness to allow these products.

On April 15, Hong Kong approved the first batch of spot-based Bitcoin and Ether ETFs by asset managers Harvest Global Investments, China Asset Management (ChinaAMC), and a consortium of Bosera Asset Management and HashKey Capital.

This was followed by WisdomTree receiving approval from the Financial Conduct Authority (FCA) to list its cryptocurrency exchange-traded products (ETPs), WisdomTree Physical Bitcoin (BTCW) and WisdomTree Physical Ethereum (ETHW), on the London Stock Exchange (LSE).

Australia’s spot Bitcoin ETF entry into the market indicates a broader acceptance of Bitcoin as an institutional asset class. Other countries are likely to follow, with major markets now offering spot Bitcoin ETFs. This regulated structure provides legitimacy and gives investors a direct way to gain exposure to Bitcoin.