Australia-based Monochrome Asset Management has recently made significant moves in the realm of Bitcoin investments, particularly with the application for its flagship product, the Monochrome Bitcoin Exchange-Traded Fund (ETF).
Monochrome’s Ambitious Move
In recent years, the global financial landscape has witnessed a surge in interest and investment in Bitcoin. Australia, too, has seen a growing demand for Bitcoin investment products. Monochrome Asset Management, a Brisbane-based firm, has stepped into this burgeoning market with its innovative approach to Bitcoin investment.
The asset manager’s ambitious move involves the application for its flagship product, the Monochrome Bitcoin ETF, to be listed on the global exchange, Cboe Australia. This decision deviates from the initial plan of listing with ASX, a larger rival exchange, indicating a strategic shift in the company’s approach to the burgeoning cryptocurrency market.
Direct Holding of Bitcoin
One of the distinctive features of this Bitcoin ETF is its focus on direct holding of bitcoin. Unlike existing Exchange-Traded Products (ETPs) in Australia, which provide exposure to spot price of the asset but do not directly hold it, this ETF aims to allow investors direct access to bitcoin holdings, akin to similar products in the United States.
Jeff Yew, CEO of Monochrome Asset Management, emphasizes the significance of this approach, stating:
“The Monochrome Bitcoin ETF stands to be the first Bitcoin ETF in Australia authorized to hold Bitcoin directly.”
He added that a decision on their Bitcoin ETF application from Cboe Australia is anticipated before the middle of the year. He expressed pride in collaborating with Cboe Australia to introduce the new bitcoin ETF, which aims to broaden investment opportunities for Australian investors. Yew emphasized the alignment of Cboe Australia’s reputation for digital assets leadership, innovation, and safe market accessibility with the asset manager’s strategic goals.
Strategic Choice of Listing Venue
The choice of listing venue, Cboe Australia, is strategic. Monochrome cites Cboe’s established reputation, strategic position, and expertise across Asia, aligning closely with the company’s goals. Derek Vladimir Henningsen, head of legal and compliance at Monochrome, notes:
“We anticipate a decision from Cboe Australia about the Monochrome Bitcoin ETF before the middle of 2024.”
Navigating regulatory requirements is a crucial aspect of launching a Bitcoin ETF in Australia. The asset manager has already secured approval from the Australian Securities & Investments Commission (ASIC), a necessary step before applying for listing with an exchange. This regulatory compliance ensures investor confidence and market accessibility.
Implications for the Australian and Global Markets
Monochrome’s endeavor marks a significant development for the Australian Bitcoin market. If approved, the spot Bitcoin ETF would provide local investors with a regulated avenue to gain direct exposure to Bitcoin, enhancing market liquidity and fostering broader participation.
The move by Monochrome Asset Management reflects broader global trends in the bitcoin space. The recent approval of spot Bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC) has spurred interest worldwide, prompting other countries to explore similar products.
In March, two Hong Kong asset management firms jointly filed for a spot Bitcoin ETF with the SFC. This move aligns with the regulator’s plan to approve ‘in-kind’ BTC spot ETFs in Q2 2024. VSFG and Value Partners seek to launch the investment vehicle for retail and institutional investors to gain a competitive edge. In the UK, the London Stock Exchange plans to accept applications for trading digital asset ETNs starting April 8, resembling ETFs in trading on major exchanges.
Conclusion
Monochrome Asset Management’s application for a spot Bitcoin ETF with Cboe Australia represents a pivotal moment in Australia’s Bitcoin market. With a focus on direct holding of bitcoin and strategic partnership with Cboe, Monochrome is poised to redefine Bitcoin investment opportunities for Australian investors, contributing to the broader evolution of the global digital asset landscape.
