Monochrome Asset Management has submitted an application to list an Ethereum exchange-traded fund (ETF) on Cboe Australia under the ticker IETH. The news was announced on Sept. 5.
The ETF is designed to provide retail investors with a regulated way to invest in Ethereum. It will also be a dual-access fund, allowing investors to request cash or in-kind redemptions.
The firm anticipates a decision on the application by the end of the month.
If approved, IETH will broaden the range of regulated crypto investment options available to Australian investors. This development follows the earlier launch of Monochrome’s Bitcoin ETF (IBTC), which became Australia’s first ETF holding Bitcoin directly.
According to the company’s website, IBTC’s Bitcoin holdings were valued at $11.3 million as of Sept. 4.
Ethereum ETFs Challenges
The plan for an Ethereum ETF by Monochrome comes at a time of challenges for similar products in the United States. US-traded spot Ethereum ETFs experienced negative net flows of $476 million during their initial trading months, largely due to outflows triggered by Grayscale’s ETHE.
Market observers attribute this underperformance to various factors, including Bitcoin’s first-mover advantage, the absence of staking options in Ethereum ETFs, and lower liquidity in the Ethereum market. These factors make these products less appealing to institutional investors.
Quinn Thompson, founder of crypto hedge fund Lekker Capital, highlighted the significant disparity in early Bitcoin and Ethereum flows. He noted the lack of substantial interest or inflows into other Ethereum ETFs to counteract the outflows.
Additionally, Bloomberg Senior ETF analyst Eric Balchunas believes the current outflows will not persist indefinitely. He anticipates that inflows into the newly launched ETFs will eventually offset the existing outflows.
