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Monochrome Asset Management said that IBTC is the first and only ETF in the country to invest directly in Bitcoin. The announcement pointed out that before IBTC, Australian investors had been able to invest only in the ETFs with Bitcoin’s indirect exposure or the Bitcoin retail products from overseas, which lacked the direct ownership of the cryptocurrency Australian Financial Services Licence regime.
Monochrome Asset Management first filed for its IBTC ETF in April and intends to capitalize on the rising global trend of Australia’s Bitcoin spot ETFs. Proposed in June 2022 and greenlit for August 2022, the VanEck fund will allow investors to gain direct exposure to BTC, ETH, and other digital assets.
In the last few months, almost three firms have introduced Bitcoin ETF products that track the underlying asset, BTC, or are linked to offshore ventures. However, such funds have been introduced by 21Shares, a significant issuer in the area that focuses on Bitcoin and other cryptos ETPs.
The firm said that IBTC’s holdings are cold, that is, not connected to the Internet, and that it has a crypto custody solution that aligns with Australia’s institutional custody regulation standards.
Speaking to Bloomberg Television, Monochrome Asset Management’s CEO, Jeff Yew, said he expects “strong interest” in their ETF, which has provided the recent uptrend of new Indirect Bitcoin ETF products over the past months. Yew also stated that the firm is ready to go out for an Ethereum ETF to own the asset directly. Additionally, he noted that there are other thematic openings for the company to invest within the digital asset industry to cater to the investors.
It came at the time of the recent listing of four physical Bitcoin ETFs in Hong Kong on 30th April. Nonetheless, 75% of Hong Kong’s ETFs have posted cumulative net redemptions, except for Bosera Hong Kong’s Bitcoin ETF.
On the other hand, Bitcoin ETFs in the United States have had an inflow of $13.9 billion, offset by $17.9 billion in outflows from the Grayscale Bitcoin Trust. Moreover, Jeff Yew expects that a robust crypto market in Australia will sustain high demand for local spot Bitcoin ETFs with at least $3 billion to $4 billion net inflows within the initial three years.
IBTC’s entry to Australia comes in the wake of the approval of spot Bitcoin ETFs in the United States earlier this year. These ETFs have been very popular, showing good market acceptance and confidence in Bitcoin.
On January 10, 2024, the SEC approved 11 new spot bitcoin ETFs.
ETFs, or exchange-traded reserves, are securities that track the underlying execution of a collection of resources or commodities. A spot bitcoin ETF is an exchange-traded fund that tracks the spot, or current, cost of bitcoin. Interestingly, by holding an inversely equivalent amount of Bitcoin to back each share of the ETF that is sold, the support is backed purely by Bitcoin.
To own Bitcoin, you have to enter your account, wallet, and key, arrange for exchange, etc. A spot bitcoin ETF is the simplest way to incorporate bitcoin into your portfolio.
The currently proposed spot bitcoin ETFs allow fund offers to be made or made available depending on market demand.
Consequently, a specific Bitcoin ETF enables speculators to purchase the contemporary cost of Bitcoins without explicit demand for the resource.
This is different from Bitcoin futures ETFs, which were affirmed for exchange by the U.S. Securities and Exchange Commission in October 2021 and can only exchange bitcoin futures.
Futures are complex derivatives instruments that track the potential future costs of the fundamental asset.
Spot Bitcoin ETFs buy a select amount of bitcoins held in a secure digital wallet by a custodian. These overseers offer Bitcoin storage in a secure vault. Most of these vaults are—as crypto insiders call them—air-gapped in “cold storage,” which implies the bitcoins’ keys are stored offline and cannot be accessed through the internet.
The ETFs then issue offers that represent the bitcoins held by the finance. These offers are estimated to reflect the current spot cost of Bitcoin and can be exchanged on conventional stock exchanges.
Spot Bitcoin ETFs make it easier for retail speculators and dealers to purchase and offer an asset tied to the current esteem of Bitcoin without requiring them to hold Bitcoin itself. They permit financial specialists seeking exposure to Bitcoin in retirement accounts to have a much easier option than opening a self-directed IRA that holds Bitcoin specifically.
A spot bitcoin ETF is an exchange-traded fund that tracks the spot or current price of bitcoin. By holding an equivalent amount of bitcoin to back every share of the ETF that is sold, the fund is actually supported by bitcoin itself.
Spot Bitcoin ETFs are available at many online brokers that offer ETFs, often with no trade commission. One major brokerage, Fidelity, has its own spot Bitcoin ETF, the Fidelity Wise Origin Bitcoin Fund (FBTC), which has been approved.
ETF Expense ratio
Grayscale Bitcoin Trust ETF (GBTC) 1.50%
VanEck Ethereum Strategy ETF (EFUT) 0.66%
Global X Blockchain ETF (BKCH) 0.50%
Amplify Transformational Data Sharing ETF (BLOK) 0.76%
Structure: Spot ETFs hold actual bitcoin, providing direct exposure to price movements and implementing a creation/redemption mechanism like other ETFs, whereas bitcoin futures ETFs hold futures contracts to track the price of bitcoin, not the actual asset itself.
The top seven Cryptos to Explode in 2024 are BlockDAG, Bitcoin, ADA, XRP, AVAX, MATIC, and TRX. The crypto market is set for a transformative phase, with BlockDAG at the forefront, having raised a significant $23.4 million in its latest presale.
Disclaimer: Analytics Insight does not provide financial advice or guidance. Also note that the cryptocurrencies mentioned/listed on the website could potentially be scams, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. You are responsible for conducting your own research (DYOR) before making any investments. Read more here.
