Monochrome Asset Management has filed to list an Ethereum exchange-traded fund (ETF) on Cboe Australia, providing a regulated way for retail investors to gain exposure to Ethereum. The ETF, to be listed under the ticker IETH, will offer dual-access fund options, allowing investors to request cash or in-kind redemptions. The firm expects a decision on the application by the end of the month, with the potential to expand regulated crypto investment options for Australian investors. This move follows Monochrome’s earlier launch of Australia’s first Bitcoin ETF, IBTC, with holdings valued at $11.3 million as of Sept. 4.
However, Ethereum ETFs have faced challenges in the United States, with negative net flows of $476 million in their initial trading months. This underperformance has been attributed to factors such as Bitcoin’s first-mover advantage, the lack of staking options in Ethereum ETFs, and lower liquidity in the Ethereum market, making these products less appealing to institutional investors. Quinn Thompson, founder of Lekker Capital, pointed out the stark contrast in early Bitcoin and Ethereum flows, noting the lack of significant interest or inflows into Ethereum ETFs to counterbalance outflows. The ETHE overhang was smaller than that of GBTC, partly due to forced selling by bankrupt entities, further impacting Ethereum ETF performance.
Despite these challenges, Bloomberg Senior ETF analyst Eric Balchunas believes that the current outflows from Ethereum ETFs will not persist indefinitely. He anticipates that inflows into newly launched ETFs will eventually offset the outflows. This outlook suggests that while Ethereum ETFs have faced difficulties initially, there may be a shift in investor sentiment and increased interest in these products over time. As the regulatory landscape evolves and institutional investors become more familiar with cryptocurrencies like Ethereum, the market for Ethereum ETFs could see growth and greater acceptance in the future.
In the Australian market, Monochrome’s move to list an Ethereum ETF could provide a unique opportunity for investors seeking exposure to the cryptocurrency in a regulated manner. This ETF, if approved, would join the firm’s existing Bitcoin ETF, expanding investment options for Australian retail investors looking to diversify their portfolios. With the potential for dual-access fund options, investors may have greater flexibility in managing their investments in Ethereum. Additionally, the launch of an Ethereum ETF in Australia could signal a growing interest in cryptocurrencies and blockchain technology among Australian investors, paving the way for further innovation and development in the digital asset space.
As Monochrome awaits a decision on its Ethereum ETF application, the firm’s strategic focus on offering regulated crypto investment options reflects a broader trend in the finance industry towards embracing digital assets. With the increasing mainstream acceptance of cryptocurrencies like Ethereum, the demand for regulated investment products in this space is likely to grow. As regulatory frameworks continue to evolve and mature, more investment opportunities in cryptocurrencies and blockchain technology may become available to investors globally. Monochrome’s initiative to list an Ethereum ETF in Australia could be a significant step towards bridging the gap between traditional finance and the emerging digital asset ecosystem.
In conclusion, Monochrome Asset Management’s filing to list an Ethereum ETF in Australia underscores the growing interest in cryptocurrencies among investors and the expanding opportunities for regulated crypto investments. Despite challenges faced by Ethereum ETFs in the US market, there is optimism for the potential growth of these products over time. As regulatory frameworks adapt to accommodate the evolving digital asset landscape, the launch of an Ethereum ETF in Australia could mark a significant milestone in providing retail investors with access to the cryptocurrency market in a secure and regulated manner. With the continued evolution of the crypto market, the demand for diverse investment options and regulatory-compliant products is likely to drive further innovation and development in this space.
