Australia’s First Direct Spot Bitcoin ETF Begins Trading

Bitcoin ETF

Despite the multiple ETPs on Cboe Australia that offer exposure to spot  crypto assets, they do not directly hold bitcoin.

Australia-based Investment Asset Management firm Monochrome has commenced trading for its direct spot Bitcoin Exchange-Traded Fund (ETF) – IBTC – on the Cboe Australia exchange. 

Cboe Australia is the innovative securities exchange committed to transforming, improving, and growing Australian investment markets by providing brokers and investors with the most efficient and cost-effective access to local and global investment opportunities. 

Multiple exchange-traded products already enable exposure to Bitcoin in Australia. However, Monochrome Asset Management is the first to secure approval under a new crypto asset licensing category introduced by Australian Financial Services (AFS) licensing rules in 2021. 

Monochrome noted that IBTC’s holdings are stored offline on a device disconnected from the internet, employing a crypto custody solution that complies with “Australian institutional custody regulatory standards.” It allows the ETF to hold bitcoin, a feature not found in other products.

“Before IBTC, Australian investors were only able to invest in ETFs that indirectly hold bitcoin or through offshore bitcoin products, both of which don’t benefit from the investor protection rules under the directly held crypto asset Australian Financial Services Licensing (AFSL) licensing regime,” Monochrome revealed in a statement.     

Regulatory Approval 

Following the U.S. approval of spot Bitcoin ETFs in January 2024, regions like Hong Kong and Australia have shown a willingness to embrace these products. By the end of April, Hong Kong had formally approved the first set of crypto-related spot ETFs, marking an achievement for the city in its pursuit to enhance itself as a prominent digital assets center.   

In Australia, firms must first obtain approval from the regulatory authority, the Australian Securities & Investments Commission (ASIC), followed by the exchange listing the product, which in this instance is Cboe Australia. Monochrome had previously secured ASIC’s approval for this product and  in April, the company applied for a spot Bitcoin ETF.

“This aligns with Monochrome’s investor protection-driven mission to offer secure, compliant, and straightforward pathways to participate in this transformative space,” Jeff Yew, CEO of Monochrome Asset Management, said.  

Meanwhile, Yew was previously CEO of Binance’s Australia business, but he left to set up Monochrome in Brisbane in 2021.