Monochrome Asset Management is preparing to launch Australia’s first spot Ethereum exchange-traded fund (ETF) on the Cboe exchange following the asset’s approval in the U.S. market.
The Monochrome Ethereum ETF (IETH), which will begin trading on Monday, October 14, offers Australian investors a new way to access the cryptocurrency.
Details Of The New Offering
“Monochrome hosted a private event in Sydney this week with our service providers, team, and partners to mark the upcoming launch of the Monochrome Ethereum ETF,” the company revealed in an October 11 post on X.
IETH will be accessible through most Australian brokerage platforms and will support transfers from crypto platforms as well as decentralized and cold storage wallets. Like its U.S. competitors, the product will track the CME CF Ether-Dollar Reference Rate and carry a competitive management fee of 0.5% with a reduced rate of 0.21% for accredited advisers.
The asset manager has secured top industry players for the IETH launch. BitGo and Gemini will provide crypto custody services, and State Street Australia will act as the fund administrator.
The launch of the spot Ethereum ETF follows the firm’s introduction of a spot Bitcoin ETF in June. Since then, the ETF has attracted $15 million (US$10.1 million) in investments, which is small compared to U.S. figures.
Unique Tax Benefits with Dual-Access Structure
Monochrome has been preparing for the IETH launch since September and believes its structure sets its ETF offering apart from its foreign counterparts.
The new fund will be the first globally to offer in-kind Ethereum subscriptions and redemptions. Company CEO Jeff Yew highlighted this feature’s potential tax benefits for investors in a recent interview with Decrypt. “A ‘bare trust’ means that your investment in the ETF may be treated as if you directly own the Ethereum,” he explained.
Yew further added that U.S. crypto ETFs, including spot Bitcoin ETFs, cannot offer in-kind support and are not operated within the same time zone.
The spot Ethereum ETF uses a dual-access bare trust structure to prevent capital gains tax for long-term holders. This allows Ethereum transfers into the ETF without changing ownership and avoiding immediate tax liabilities.
The new offering is also said to give investors absolute entitlement to their allocated Ethereum, ensuring that any actions by the trustee on the asset are on behalf of the client. This should prevent them from being subject to capital gains tax during transfers or redemptions, provided the ownership remains unchanged.
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