Monochrome After Spot in Crowded Australian Crypto ETF Market

The Australian securities regulator has paved the way for asset manager Monochrome to list its crypto ETFs, but there’s loads of competition


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key takeaways

  • Monochrome hopes to seperate itself from other crypto ETF managers by flaunting a different kind of license
  • The firm’s ETFs will track the underlying spot prices of bitcoin and ether, pending approval

Bitcoin-focused asset management firm Monochrome wants to add more exchange-traded funds (ETFs) the already crowded list of Australian crypto spot vehicles.

Monochrome said Tuesday its partner Vasco Trustees has received a financial license to operate crypto spot ETFs in the country, paving the way for an official listing on the Australian Securities Exchange (ASX).

Monochrome is hoping its trustee’s fresh Australian Financial Services accreditation (AFS) — obtained via the country’s securities regulator — will help separate itself from the growing pack of crypto exchange-listed products Down Under.

“We see choice being a good thing for investors, particularly when dealing in the regulated space, as not all offerings are equal,” Jeff Yew, Monochrome’s CEO, told Blockworks in an interview.

The Australian Securities and Investments Commission (ASIC) granted trustee Vasco its approval Tuesday. Monochrome is looking to list bitcoin and ether ETFs under tickers IBTC and IETH, “in due course.”

Yew told Blockworks that Monochrome had worked closely with Vasco to upgrade its AFS license in order to accommodate a crypto-asset authorization on its financial services license.

Other Australian crypto ETFs indirectly hold the crypto-assets and operate under the general financial asset authorization, Yew said, adding that Monochrome’s ETF offering will directly hold the underlying crypto-assets and is specifically authorized to do so.

To date, no crypto ETFs operate under an AFS license with crypto-asset authorization, Monochrome said in a blog post. Domestic crypto exchange BTC Markets became the country’s first crypto firm to receive an AFS license in June.

It was a sign to investors that Australia may be fast becoming a central hub for trading digital assets, especially considering the US is yet to approve any spot crypto ETF applications.

Australian crypto ETFs yet to see significant interest

As for Monochrome’s bid, Yew said the company has lodged an ETF application with the ASX but the approval process will take some time.

In any case, several similar crypto funds are already listed in the country via CBOE Australia, but they’ve moved slowly out the gate following their debut.

21Shares’ bitcoin and ether ETFs both underwhelmed on the first day’s trading while a decline in overall market activity in recent months has impacted sentiment.

BetaShares Metaverse ETF, 3iQ CoinShares’ Bitcoin Feeder ETF and Cosmos Purpose Ethereum Access ETF have also performed worse than previously anticipated, ASX data shows.

Yew told Blockworks Monochrome was aware of the “relatively lackluster” performance of the funds but remained steadfast. He reasoned that Monochrome is looking long-term by building rails for retail and professional investors to access the nascent digital asset sector.

“Having personally ridden multiple market cycles since 2013, bear markets are the best time to build vital infrastructure, away from the froth and FOMO that accompanies the heights of bull markets,” Yew said.

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