Australia is set to debut its first spot Bitcoin exchange-traded fund (ETF) — one that directly holds the asset — with trading kicking off when the markets open on Tuesday.

The Monochrome Bitcoin ETF (IBTC) will commence trading on the Cboe Australia exchange starting Tuesday, June 4.

While there are already various exchange-traded products in Australia that provide Bitcoin exposure, Monochrome Asset Management is the pioneer in obtaining approval under a new crypto asset licensing category established under Australian Financial Services (AFS) licensing rules in 2021.

This approval permits the ETF to directly hold Bitcoin.

According to Monochrome, the IBTC’s Bitcoin is securely stored offline in devices disconnected from the internet, and the custody solution adheres to “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,” Monochrome stated.

In contrast to its American equivalents, which are cash-settled, this ETF supports in-kind redemptions for investors.

Monochrome CEO Jeff Yew expressed to Cointelegraph his expectation of “strong interest” in the firm's ETF, citing the recent growth of indirect Bitcoin ETF products.

He confirmed that the company is “ready” to develop and introduce an Ether ETF that will also directly hold the asset.

“We are also exploring other thematic opportunities within the digital asset sector to meet investor demand,” he continued.

The introduction of IBTC in Australia occurs shortly after the launch of four spot Bitcoin ETFs in Hong Kong on April 30.

However, three of the four Hong Kong ETFs experienced cumulative net outflows since their inception, except for Bosera’s spot Bitcoin ETF.

Meanwhile, U.S. Bitcoin ETFs have performed better, with cumulative inflows of $13.9 billion, despite $17.9 billion in outflows from the Grayscale Bitcoin Trust.

Yew described Australia as a “very crypto-heavy country” and anticipates that local spot Bitcoin ETFs could attract between $3 billion to $4 billion in net inflows within the first three years.

Sources:

https://cointelegraph.com/news/australia-first-spot-bitcoin-etf-monochrome

https://x.com/MonochromeAsset/status/1797402377965981820