Australia is poised to join the ranks of Hong Kong, Canada, and the U.S. in offering investors access to an exchange-traded fund (ETF) that directly holds Bitcoin.

The Monochrome Bitcoin ETF (IBTC), Australia's inaugural spot Bitcoin ETF, is scheduled to commence trading on Tuesday, June 4, upon the opening of markets on the Cboe Australia exchange.

While Australia already boasts several exchange-traded products providing exposure to Bitcoin, Monochrome Asset Management stands out as the first to receive approval under a new crypto asset licensing category established within Australian Financial Services (AFS) licensing regulations in 2021. This designation enables the ETF to directly hold Bitcoin, a significant departure from existing indirect investment options.

Unlike its U.S. counterparts, which operate on a cash creation model, IBTC facilitates in-kind redemption from investors. The ETF's holdings are securely stored offline, employing a crypto custody solution compliant with Australian institutional custody regulatory standards.

According to Monochrome, the introduction of IBTC fills a critical gap in the Australian market, offering investors direct exposure to Bitcoin while benefiting from the protective measures afforded by the directly held crypto asset AFS licensing regime.

Jeff Yew, CEO of Monochrome, expressed confidence in IBTC's potential, citing the sustained growth of indirect Bitcoin ETF products. He revealed plans for the development and launch of an Ether ETF, which will also hold the asset directly, in response to growing investor demand.

The debut of IBTC in Australia closely follows the introduction of four spot Bitcoin ETFs in Hong Kong in late April. While the performance of these ETFs has varied, Yew remains optimistic about the reception of spot Bitcoin ETFs in Australia, projecting significant net inflows totaling between $3 billion to $4 billion within the first three years.