ASX’s First Spot Bitcoin ETF Application Marks Significant Milestone

Key Points:

• Monochrome and Vasco file for Australia’s first fully-licensed Bitcoin exchange-traded fund under new crypto provisions.
• The Monochrome Bitcoin ETF provides regulated exposure for retail investors through directly holding Bitcoin.
• Renewed interest in Bitcoin ETFs is reflected in major US institutions filing for spot Bitcoin ETFs.

According to Blockworks, Monochrome and Vasco Trustees file for the first Bitcoin ETF under new crypto provisions in Australia’s licensing regime, providing regulated exposure for retail investors.

Australia’s first fully-licensed spot Bitcoin ETF has been filed with the Australian Securities Exchange (ASX) in partnership between Monochrome, a Bitcoin-focused asset management firm, and Vasco Trustees. The updated application for the Monochrome Bitcoin ETF (IBTC) is intended to provide regulated exposure for retail investors.

The move represents the first filing for a spot Bitcoin exchange-traded fund on the ASX under a licensing regime featuring crypto provisions established almost two years ago. After Monochrome’s partner, Vasco received a financial license to operate crypto spot ETFs in the country, the application was lodged.

The Australian Securities and Investments Commission (ASIC) revised its Australian financial services (AFS) license rules in October 2021, promoting market transparency among crypto firms while enhancing investor protections. The rules dictate that institutional support and acceptance of the underlying crypto should exist for a spot ETF. “Reputable” and “experienced” service providers must be willing to support those products. Only two AFS licensees, including the issuer behind Monochrome’s ETF, have any retail crypto-asset license authorization. Others are listed as wholesale, meaning they are not yet green-lit to offer such products to mom-and-pop investors.

Cosmos Asset Management’s Bitcoin exchange-traded fund attempted to become Australia’s first Bitcoin ETF last year. Still, it was established as a fund of funds offering exposure to one of Canada’s spot Bitcoin ETFs managed by Purpose. Global X and 21Shares’ Bitcoin ETF were the first to list in Australia, while Cosmos delisted its offering in November last year due to a lack of interest.

Jeff Yew, Monochrome CEO, said that what sets the Monochrome Bitcoin ETF apart from other fund structures is that it is authorized under the “crypto-asset” licensing category, which allows the fund to hold Bitcoin directly on the fund level. He added he was confident that a positive outcome would be reached.

Renewed interest in spot Bitcoin exchange-traded funds has also hit the US, with major institutions such as BlackRock, Invesco, and WisdomTree all filing over the past month. This renewed interest reflects the growing acceptance of Bitcoin ETFs as a legitimate investment vehicle, which is expected to continue as more investors seek exposure to the cryptocurrency market.

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