Monochrome to launch Australia’s first Ethereum ETF

Monochrome Asset Management is preparing to launch Australia’s first Ethereum exchange-traded fund (ETF) on the Cboe exchange following approval of the asset in the US market.

The Monochrome Ethereum ETF (IETH), which will begin trading on Monday 14 October, offers Australian investors a new way to access the cryptocurrency.

Details of the new offer

“Monochrome hosted a private event in Sydney this week with our service providers, team and partners to mark the upcoming launch of the Monochrome Ethereum ETF,” the company revealed in an October 11 post on X .

IETH will be accessible through most Australian brokerage platforms and will support transfers from crypto platforms as well as decentralized and cold storage wallets. Like its US competitors, the product will track the CME CF Ether-Dollar benchmark rate and carry a competitive management fee of 0.5% with a reduced fee of 0.21% for accredited advisors.

The asset manager has secured major industry players for the IETH launch. BitGo and Gemini will provide crypto custody services and State Street Australia will act as the fund manager.

The launch of the spot Ethereum ETF follows the company’s introduction of a spot Bitcoin ETF in June. Since then, the ETF has attracted $15 million (US$10.1 million) in investments, which is small compared to US figures.

Unique tax benefits with double access structure

Monochrome has been preparing for the IETH launch since September and believes its structure differentiates its ETF offering from its foreign counterparts.

The new fund will be the first globally to offer in-kind Ethereum subscriptions and redemptions. The company’s CEO Jeff Yew highlighted the potential tax benefits of this feature for investors in a recent interview with Decrypt. “A ‘bare trust’ means that your investment in the ETF can be treated as if you owned the Ethereum directly,” he explained.

Yew further added that US crypto ETFs, including spot Bitcoin ETFs, cannot provide in-kind support and do not operate within the same time zone.

The spot Ethereum ETF uses a dual-access bare trust structure to avoid capital gains tax for long-term holders. This allows transfers from Ethereum to the ETF without changing ownership and avoiding immediate tax obligations.

The new offering is also said to give investors an absolute right to their allocated Ethereum, ensuring that any action by the trustee on the asset is on behalf of the client. This should prevent them from being subject to capital gains tax during transfers or repayments, as long as the ownership remains unchanged.

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