- Monochrome’s Ethereum ETF (IETH) launches, offering Australia’s first-in-kind ETH subscriptions.
IETH provides tax efficiency with a bare trust structure and competitive fee rates.
As an analyst with extensive experience in the cryptocurrency investment landscape, I find the launch of Monochrome’s Ethereum ETF (IETH) to be a significant milestone for Australia and a promising development for global investors.
Monochrome Asset Management is preparing to introduce Australia’s inaugural spot Ethereum [ETH] exchange-traded fund (ETF) on Cboe Australia, signifying a significant advancement in Australia’s cryptocurrency investment sector.
Based on the achievements of its Bitcoin ETF, IBTC, which was launched in August 2023 and has amassed $15 million in assets, Monochrome is introducing a new Ether ETF called IETH. The purpose of this ETF is to offer Australian investors a direct investment opportunity in Ethereum.
For those not aware, on September 5th, the asset manager submitted an application aiming to receive approval by the end of the current month.
Luckily, following a quick approval, unlike the latest regulatory hurdles faced in the U.S., IETH trading will kick off on October 14th.
How is Monochrome’s Ethereum ETF different from the US?
As a global crypto investor, I find the Australian fund stands out among its U.S. counterparts boasting multi-billion dollar portfolios. What sets it apart is its unique approach to Ethereum investments – providing in-kind Ethereum subscriptions and redemptions, which is a rare offering in the broader investment landscape.
In an exclusive chat, Jeff Yew, CEO of Monochrome Asset Management, emphasized a distinctive tax-friendly aspect of the IETH during his discussion with a media outlet.
He made clear that the double-entry trust setup of the fund is intended to bypass capital gains tax triggers, providing a tactical edge for those who hold Ethereum over the long term.
Through this setup, investors can move their Ethereum directly into the ETF without altering its legal or beneficial ownership, which might improve the potential tax benefits associated with direct transfers during subscriptions and redemptions.
Yew added,
A ‘bare trust’ signifies that your investment in the ETF is considered as though you personally own the Ethereum.
In fact, when IBTC gained momentum with its ETF in-kind subscription model, Yew said,
It’s becoming evident that there’s a noticeable trend with our Bitcoin ETF. What we’re observing is a shift in custody locations from cryptocurrency exchanges to the ETF itself, which is where we’re experiencing the most significant growth.
In other words, the latest U.S. ETF data shows a striking difference: on October 11th alone, Bitcoin ETFs attracted investments worth approximately $253.6 million, whereas Ethereum ETFs experienced a slight outflow totaling around $0.1 million.
As a crypto investor, I find myself observing conflicting patterns within the market, but I remain hopeful about Ethereum’s future based on the enthusiasm demonstrated by industry titans like BlackRock and Fidelity. Their unwavering optimism gives me confidence in the long-term prospects of this digital currency.
Challenges ahead
Despite the Australian market not likely matching those significant influxes, Monochrome intends to capitalize on the burgeoning local curiosity about cryptocurrency investments. They aspire to increase their influence, anticipating that investor excitement will persist throughout the current year.
American cryptocurrency Exchange-Traded Funds (ETFs), such as Bitcoin ETFs, cannot be supported in the form of the underlying asset at present, and they are currently not active within our time zone.
As a researcher, I find that the Monochrome Ethereum ETF (IETH) stands to provide Australian investors with a wide range of access points via prominent brokerage platforms, facilitating seamless transactions in the realm of cryptocurrency exchanges and wallet transfers.
For accredited advisors, the fee has been cut down significantly to just 0.21%, which is quite similar to the typical fees in the U.S. market, ranging between 0.20% and 0.25%.
Hence, positioned for growth, IETH is well-prepared to capture any resurgence in market demand.
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2024-10-14 14:16