The launch of Monochrome Ethereum ETF follows the crypto investment firm’s spot bitcoin ETF, which went live in August.

Monochrome will launch Australia’s first spot ether (ETH) exchange-traded fund (ETF) on Tuesday.

The Monochrome Ethereum ETF (IETH), will debut at 10:00 local time. The ether fund created by Australian crypto investment firm, Monochrome, comes after the launch of its spot bitcoin ETF in August. As of October 10, the bitcoin ETF fund held 165 bitcoin (BTC) worth just over $10 million.

Similar to the spot crypto ETFs in Hong Kong, IETH will allow both cash and in-kind applications and redemptions for investors, meaning that investors can buy into and cash out of the fund with ether.

As of October 10, Hong Kong’s spot bitcoin and ether ETFs hold net assets of $262.97 million and $35.07 million, respectively. By contrast, U.S.-listed ETFs held bitcoin worth $58.66 billion ether worth $6.74 billion, according to SoSoValue.

Several countries have approved listings of spot crypto ETFs after the launch of the funds in the U.S. in January, though all have been significantly smaller in scale than their U.S. counterparts. Last week, South Korea’s news1 also reported that the country’s Financial Services Commission would consider allowing crypto ETFs.

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Order book liquidity refers to the market’s ability to absorb large buy and sell orders without influencing the spot price.

Exchange-traded funds (ETFs) will be net positive for market liquidity, making it easier to execute large buy and sell orders at stable prices. That’s what CoinDesk reported in December 2023, before the ETFs were approved in the U.S.

The liquidity boost materialized well enough in the bitcoin (BTC) market following the debut of spot ETFs on Jan. 11. With ether (ETH), however, the story played out differently. Ether’s order book liquidity has declined since the July 23 debut of nine ETFs, according to data tracked by London-based CCData.

Since the ETFs’ introduction, the average 5% market depth for ETH pairs on U.S.-based centralized exchanges has declined by 20% to roughly $14 million. On offshore centralized venues, it’s dropped by 19% to around $10 million. In other words, it’s actually now easier to move the spot price by 5% in either direction, a sign of reduced liquidity and increased sensitivity to large orders.

“Although the market liquidity for ETH pairs on centralized exchanges remains greater than what was at the beginning of the year, the liquidity has dropped by nearly 45% since its peak in June,” Jacob Joseph, a research analyst at CCData, told CoinDesk in an interview. “This is likely due to the poor market conditions and the seasonality effects in the summer, often accompanied by lower trading activity.”

The measure refers to the amount of buy and sell orders within 5% of the mid-market price for an asset. Greater depth indicates strong liquidity and lower slippage costs. CCData considered the 5% market depth for all ETH pairs on 30 centralized exchanges.

Ether ETFs have witnessed a cumulative outflow of over $500 million since July 23, according to data tracked by Farside Investors. Ether’s price has declined by over 25% to $2,380, CoinDesk data show.

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