As a seasoned researcher with a keen interest in the evolving world of cryptocurrencies and ETFs, I find Monochrome Asset Management’s move to launch Australia’s first spot Ethereum ETF particularly intriguing. With my background in finance and technology, it’s exciting to see the convergence of these two worlds Down Under.
Monochrome Asset Management plans to debut Australia’s inaugural spot Ethereum exchange-traded fund (ETF) on the Cboe exchange, having secured approval for the asset in the U.S. market.
Starting from October 14, the Monochrome Ethereum ETF (IETH) provides an innovative avenue for Australian investors to tap into the world of cryptocurrencies.
Details Of The New Offering
This week, Monochrome held a private gathering in Sydney for our service providers, employees, and associates to celebrate the impending debut of the Monochrome Ethereum ETF. This announcement was made in a blog post dated October 11th on platform X.
The IETH can be obtained via numerous Australian brokerage services, and it allows transfers from cryptocurrency platforms, decentralized wallets, as well as offline storage wallets. Similar to its American counterparts, this product follows the CME CF Ether-Dollar Reference Rate and offers a competitive management fee of 0.5%. However, for accredited advisers, the fee is reduced to 0.21%.
For the launch of IETH, the asset manager has successfully enlisted leading figures from the industry. BitGo and Gemini are on board to offer cryptocurrency safekeeping services, while State Street Australia takes up the role of the fund administrator.
The debut of an Ethereum ETF based on spots occurred after they introduced a similar Bitcoin ETF in June. To date, this ETF has garnered approximately $15 million (equivalent to US$10.1 million) in investments, which is relatively minor compared to investment amounts seen in the United States.
Unique Tax Benefits with Dual-Access Structure
Since September, Monochrome has been gearing up for the IETH launch, feeling confident that its unique structure gives it an edge in the ETF market compared to its international competitors.
As an analyst, I’m excited to share that our new fund is pioneering a unique approach by providing in-kind Ethereum subscriptions and redemptions on a global scale. In a recent discussion with Decrypt, our CEO, Jeff Yew, emphasized the potential tax advantages this feature could bring to investors. Essentially, an ‘Ethereum bare trust’ means your investment in the ETF may be considered equivalent to you owning Ethereum directly, offering a potentially more tax-efficient investment experience.
Additionally, you mentioned that U.S. Exchange-Traded Funds (ETFs) dealing with cryptocurrencies, such as those focused on Bitcoin, do not provide direct assistance and operate independently from each other, without being synchronized to the same time zone.
An Ethereum ETF employs a two-tiered trust setup called a bare trust, which exempts long-term investors from capital gains taxes. This arrangement enables seamless transfer of Ethereum into the fund without altering ownership or triggering immediate tax obligations.
The new offering is also claimed to provide investors with full control over their assigned Ethereum, meaning that any actions taken by the trustee regarding this asset are done on behalf of the client. This arrangement aims to exempt them from capital gains tax during transfers or redemptions, as long as the ownership remains consistent.
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2024-10-15 02:46