Monochrome Asset Management has officially announced the launch of Australia’s inaugural spot Ethereum exchange-traded fund (ETF), set to begin trading on Cboe on Monday (Tuesday at 10 AM AEDT). This launch comes shortly after the company’s introduction of its Bitcoin ETF (IBTC) just two months ago.
The new ETF, named IETH, follows the approval of Ethereum ETFs in the U.S. and aims to capture investor interest. Since its debut in August 2023, the Bitcoin ETF has attracted $15 million (approximately US$10.1 million) in investments—a modest figure when compared to the billions managed by U.S. ETFs.
IETH is designed to differentiate itself through unique features, such as in-kind subscriptions and redemptions, enhancing tax efficiency for investors. CEO Jeff Yew noted that this structure allows long-term Ethereum holders to transfer their assets into IETH without triggering a capital gains tax event. “A bare trust means that your investment in the ETF may be treated as if you directly own the Ethereum,” Yew explained.
This innovative structure ensures that the actions of the ETF’s trustee are treated as actions of the investor, thus preventing capital gains tax during redemption or transfer as long as ownership remains unchanged.
While Monochrome does not anticipate matching the significant inflows observed in the U.S. market after the approval of multiple Bitcoin and Ethereum ETFs, the company remains optimistic about the increasing interest from Australian investors this year.
IETH will track the CME CF Ether-Dollar Reference Rate – Asia Pacific Variant and will feature a management fee of 0.50%, which can be reduced to 0.21% for accredited advisers. This positions the ETF competitively within the U.S. market, where similar funds generally charge fees ranging from 0.20% to 0.25%.
The ETF will be available on most Australian brokerage platforms and will facilitate transfers from various crypto platforms, decentralized wallets, and cold wallets. Custody services for IETH will be provided by BitGo and Gemini, with State Street Australia serving as the fund administrator.
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