Australia Inches Closer to First Spot Bitcoin ETF- Monochrome Applies with Cboe Australia 

Australian investors are eagerly awaiting potential new avenues to invest in Bitcoin. Monochrome Asset Management, a prominent Australian investment firm, has taken a significant step by applying to list its Monochrome Bitcoin ETF on Cboe Australia, a global exchange. This move could be a turning point for the Australian cryptocurrency market, possibly launching the country’s first spot Bitcoin ETF.

Spot Bitcoin ETFs

Exchange-traded funds (ETFs) are investment vehicles that pool investor money to buy a basket of assets or track an underlying asset. These allow investors to gain exposure to Bitcoin’s price movements through a familiar and regulated investment product. This differs from some existing Australian crypto exchange-traded products, which do not hold actual Bitcoin but rather offer indirect exposure through derivatives contracts.

Advantages of Spot Bitcoin ETFs

  • Direct Exposure- Investors directly own a share of the underlying Bitcoin held by the ETF
  • Regulation and Security– Spot Bitcoin ETFs being subject to regulations and oversight by financial authorities, enhance investor protection compared to unregulated cryptocurrency exchanges.
  • Accessibility- Traditional investment platforms may offer spot Bitcoin ETFs, making them accessible to a broader range of investors who are comfortable with ETFs.

Why Cboe Australia?

While the Australian Securities Exchange (ASX) has higher trading volumes, Monochrome chose Cboe Australia for its listing venue. The firm’s decision likely reflects a strategic alignment with Cboe Australia’s strengths:

  • Established Reputation- Cboe Australia is a well-regarded exchange with a proven track record.
  • Asian Expertise—Cboe Australia has a strong presence and network in the Asian financial markets, potentially attracting broader investor interest in the ETF.
  • Growth Potential– Cboe Australia might be viewed as a platform with significant room for growth in the cryptocurrency ETF space.

The Approval Process

The process for listing ETFs in Australia differs from some other countries, like the US. Here is a quick look at the process.

  • ASIC Approval-The Australian Securities & Investments Commission (ASIC) acts as the primary regulator for financial products in Australia. Monochrome has already secured approval from ASIC for its Bitcoin ETF, suggesting that it meets the regulatory requirements.
  • Stock Exchange Listing- Once approved by ASIC, firms must apply to a stock exchange for listing. Monochrome has submitted its application to Cboe Australia for consideration.

Timeline and Expectancy

Monochrome expects a decision on their application from Cboe Australia by mid-2024. However, this timeline could be subject to change depending on the exchange’s review process. Previously, the firm aimed for a second-quarter 2024 listing. This earlier target might need to be adjusted based on Cboe Australia’s review timeframe.

Likely Impact on the Australian Crypto Market

If approved, the Monochrome Bitcoin ETF could be a game-changer for the Australian crypto landscape.

 A regulated spot Bitcoin ETF could attract new investors who are hesitant to enter the unregulated cryptocurrency exchange space but are interested in gaining exposure to Bitcoin. Moreover, the launch of the first spot Bitcoin ETF could stimulate further innovation and development within the Australian cryptocurrency ecosystem.

Finally, the success of a spot Bitcoin ETF could prompt Australian regulators to develop clearer frameworks for cryptocurrency-related products and services.

Challenges and Considerations

Other asset managers in Australia might be planning similar ETF offerings, creating competition within the spot Bitcoin ETF space. Moreover, regulatory developments in other major economies, such as the US, could influence the future of cryptocurrency ETFs in Australia.

The coming months will be crucial as Cboe Australia deliberates on Monochrome’s application. If approved, it would be a major milestone, paving the way for further innovation in Australian crypto offerings. However, even if the application is not approved in the immediate future, Monochrome’s initiative has sparked a conversation about the future of cryptocurrency ETFs in Australia.

Joas Buysse

Joas is a seasoned investor and fintech expert from Bassecourt, Jura, Switzerland. She also works as an administration executive at Stock B. Joas has been working with SB news since 2 years to educate its readers about NFT, Cryptocurrency and Fintech tips.

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