In a significant development for cryptocurrency investors, Monochrome Asset Management has launched the Monochrome Ethereum ETF (IETH), touted as the world’s first Ethereum exchange-traded fund to incorporate in-kind redemption capabilities. This innovative ETF aims to provide long-term investors with reduced tax liabilities while offering a more efficient investment structure.
Innovative Tax Structure
The Monochrome Ethereum ETF employs a unique dual-access bare trust structure, allowing participants to transfer Ethereum into the fund without triggering capital gains tax events. This is a notable distinction from U.S.-listed crypto ETFs, where such in-kind transfers are not permitted. According to Monochrome CEO Jeff Yew, this feature enhances tax efficiencies, making the IETH more attractive to investors looking to mitigate immediate tax liabilities.
Yew elaborated on the benefits, stating, “A ‘bare trust’ means that your investment in the ETF may be treated as if you directly own the Ethereum.” This structure ensures that any actions taken by the trustee are considered actions of the investor, preventing capital gains tax implications as long as ownership remains unchanged.
Launch Details
The Monochrome Ethereum ETF (IETH) commenced trading on the Cboe Australia exchange on October 14, following the asset manager’s earlier launch of a spot Bitcoin ETF in June. Despite a lukewarm reception for spot Ether ETFs in the U.S. market, Monochrome’s offering aims to revive interest in this investment vehicle in Australia. The ETF will be available through most Australian brokerage platforms and will support transfers from various crypto wallets, including decentralized and cold storage options.
Competitive Positioning
The IETH ETF features a management fee of 0.5%, which is competitive with U.S. crypto ETFs, where management fees typically range from 0.20% to 0.25%. Additionally, the fee is reduced to 0.21% for accredited advisers. Monochrome has partnered with notable market players, including BitGo and Gemini, to provide crypto custody services, while State Street Australia will serve as the fund administrator for the ETF.
Market Outlook
Despite a significant decline in Ether inflows in the U.S. market, Monochrome remains optimistic about the future of its Ethereum ETF. Large institutional players like BlackRock continue to express confidence in the overall market, suggesting that a resurgence in demand could positively impact Monochrome’s IETH as well.
Conclusion
The launch of the Monochrome Ethereum ETF marks a pivotal moment in the evolution of cryptocurrency investment products. By introducing in-kind redemption features and a tax-efficient structure, Monochrome is positioning itself as a leader in the Australian market while offering a viable alternative to U.S.-listed crypto ETFs. As market dynamics continue to shift, investors will be keenly watching the performance and reception of this groundbreaking ETF.
Related topics:
Will Bitcoin Price Hit $150K in Q4? Expert Insights and Market Analysis
FBI Launches Fake Token ‘NexFundAI’ to Expose Crypto Scams
Chiliz (CHZ) Price Surges 13% Following Binance Airdrop Announcement
