Monochrome Asset Management Launches Australia’s First Ether-Holding ETF
Monochrome Asset Management has made a groundbreaking move in Australia’s financial market by introducing the country’s first-ever exchange-traded fund (ETF) that directly holds Ether (ETH), the second-largest cryptocurrency by market capitalization.
The Monochrome Ethereum ETF (IETH) made its debut on October 15 on the Cboe Australia exchange, marking a significant milestone for the region’s investment landscape. Within a few hours of its launch, the ETF had already accumulated $176,600 in net assets (262,500 Australian dollars), as reported by Cboe Australia.
The IETH fund comes with a management fee of 0.50% and allows investors to carry out in-kind transactions, giving them the flexibility to trade using either cash or Ether. This unique feature sets it apart from other ETFs in Australia, as it offers dual-access to fiat currency and cryptocurrency, enabling seamless movement between the two.
BitGo and Gemini have been appointed as custodians for the fund, ensuring the security and safekeeping of the assets. State Street Australia will handle administrative responsibilities.
Monochrome Asset Management had previously achieved success with its Monochrome Bitcoin ETF (IBTC), which was launched in June 2024. The IBTC fund has attracted approximately $10.7 million in assets (16 million Australian dollars) since its inception. CEO Jeff Yew attributes a significant portion of the inflows to clients transferring their cryptocurrency holdings from exchanges to the ETF.
Yew expressed optimism about the future performance of spot crypto ETFs in the Australian market, citing the country’s growing appetite for such investment products. He believes that Australia is on a different trajectory with ETFs and offers a much larger market to explore.
The launch of the Monochrome Ethereum ETF is part of a global trend in the increasing adoption of cryptocurrency ETFs. In June, VanEck introduced Australia’s first spot Bitcoin ETF, which currently manages around $35 million in assets (52 million Australian dollars). In the United States, there are already 11 spot Bitcoin funds collectively managing $19.3 billion in assets this year.
The U.S. crypto ETF market has witnessed a surge in inflows, with spot Bitcoin ETFs experiencing their highest daily inflow in four months on October 14. A total of $555.9 million flowed into the funds, driven by Bitcoin’s recent price surge to a two-week high of $66,500. This significant growth is attributed to the increasing interest from advisers and institutional investors rather than speculative retail traders.
While Bitcoin ETFs are flourishing, Ethereum ETFs are seeing more modest activity. Bitwise, VanEck, Franklin, and Grayscale observed zero flows on Monday, while Fidelity and Invesco experienced minor flows.
Overall, the demand for digital asset investment products has been on the rise, with a surge in inflows reaching $407 million last week, largely influenced by investor sentiment surrounding the upcoming U.S. elections.