Ethereum ETF launched in Australia: What makes this fund unique?

The first ever Australian Ethereum ETF has been launched. This ETF will be issued by Monochrome Asset Management and trading begins today at 10:00 AM local time.

This new product, the Ethereum ETF (IETH), follows the launch of Monochrome’s Bitcoin ETF (IBTC) in August 2023, which has already attracted $15 million.

A unique ETF

This $15 million is in stark contrast to the billions in US funds. But Monochrome claims to be in a unique position with the possibility of in-kind Ethereum subscriptions and redemptions. This makes the fund more tax efficient, according to Monochrome CEO Jeff Yew. The use of a so-called ‘bare trust’ structure prevents the transfer of Ethereum from triggering capital gains taxes.

This structure offers an advantage not available with US crypto ETFs. Yew emphasizes that American funds do not operate in the same time zone, which gives Monochrome an additional competitive advantage in the Asian market. The ETF will charge a commission of 0.50%, which is reduced to 0.21% for accredited advisors. This puts the ETF within reach of its US competitors, which charge between 0.20% and 0.25%.

The fund will be available on most Australian trading platforms and supports transfers from crypto platforms, decentralized wallets and cold wallets. Well-known players such as BitGo and Gemini will provide custody services.

Crypto is becoming more popular among institutions

Monochrome’s initiative comes at a time of growing interest in crypto ETFs. Earlier this year, the US Securities and Exchange Commission (SEC) approved 11 spot Bitcoin ETFs, followed by nine Ethereum ETFs in May.

Although the Australian market will probably never attract the same capital, Monochrome believes it can still benefit from the growing interest in the region.

In addition, another Australian crypto fund, DigitalX, has also received approval to launch its own spot Bitcoin ETF on the Australian stock exchange. This strengthens Australia’s position in the emerging crypto ETF market. In addition to Australia, crypto ETFs also appear to be quickly approved in South Korea.