Monochrome After Spot in crowded Australian crypto ETF market

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

Monochrome said on Tuesday that 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 hopes the trustee’s recent Australian Financial Services (AFS) accreditation – obtained via the country’s securities regulator – will help differentiate itself from the growing pack of crypto-listed products Down Under.

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

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

Yew told Blockworks that Monochrome had been working closely with Vasco to upgrade its AFS license 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 authorization for financial assets, 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 authorization for crypto assets, 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 could quickly become a key hub for trading digital assets, especially considering the US has yet to approve any spot crypto ETF applications.

Australian crypto ETFs have yet to see significant interest

Regarding Monochrome’s bid, Yew said the company has submitted an ETF application to the ASX, but the approval process will take some time.

In any case, several similar crypto funds are already listed on the ASX, but they have moved slowly out of the gate after their debut.

21Shares’ bitcoin and ether ETFs both underwhelmed on the first day of trading, while a slowdown in overall market activity in recent months weighed on sentiment.

BetaShares’ Metaverse ETF, 3iQ CoinShares’ Bitcoin Feeder ETF and the Cosmos Purpose Ethereum Access ETF have also underperformed previously expected, ASX data shows.

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

“Having personally ridden several market cycles since 2013, bear markets are the best time to build critical infrastructure, away from the froth and FOMO that accompany the highs of bull markets,” Yew said.

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