The latest Global X data until 29 August showed the Monochrome Bitcoin ETF (IBTC) delivered a 92.1 per cent return over the year, matching the gains of Betashares’ Gaming and eSports ETF (GAME) and outpacing rival cryptocurrency funds.
VanEck Bitcoin ETF (VBTC) and DigitalX Bitcoin ETF (BTXX) followed closely, returning 88.9 per cent and 81.9 per cent, respectively, while the Global X Bitcoin ETF (EBTC) gained 83.6 per cent.
The strong 12-month run came despite a sharp pullback in August, when bitcoin ETFs were among the market’s weakest performers.
Monochrome’s IBTC slid 8.1 per cent during the month, in line with peers, as investors locked in profits after bitcoin hit fresh record highs.
Stagflation concerns and soft economic data weighed on risk appetite in August, prompting flows into broad-based global share ETFs, while bitcoin ETFs faced short-term headwinds from heightened volatility and cautious investor sentiment.
Monochrome’s top spot on the leaderboard is particularly interesting given the context of the competition seen in the industry over the past 12 months.
Namely, as reported previously by InvestorDaily, Monochrome has repeatedly framed IBTC as Australia’s first “direct” bitcoin ETF, citing its single-tier structure and compliance with ASIC’s cryptocurrency asset licensing regime, which requires retail funds holding substantial digital assets to be specifically authorised.
In contrast, Global X launched EBTC in 2022 under a wholesale-retail feeder fund model, which sits outside those newer retail licensing provisions.
While Monochrome last year argued its structure offered a more transparent pathway for investors, Global X maintained the distinction was largely regulatory and has little impact on outcomes.
Chief executive at Global X, Evan Metcalf, stressed at the time that both funds ultimately provide direct bitcoin exposure, use institutional-grade custody and allow in-kind and cash redemptions, meaning “effectively nothing” differentiates them from an investor’s perspective.
Reiterating IBTC’s uniqueness on Monday, chief commercial officer at Monochrome, Bridget Nichols, told InvestorDaily that the firm’s ETF has “a very operationally efficient trading model”, alongside the lowest management fee in Australia.
“Our management fee is currently 24 basis points p.a. below all of the other bitcoin ETFs in Australia, meaning investor total returns are maximised,” Nichols said.
As she explained, other bitcoin ETFs that use the “feeder structure” hold an intervening financial product, which then holds bitcoin. She added that while all funds ultimately provide exposure to bitcoin, feeder funds use an additional structure in the middle.
“Our view is this structure is not as operationally efficient as a direct holding structure,” she said.
Commenting on the firm’s product development pipeline, Nichols said “our house position is that bitcoin is very hard to outperform and so the focus of our product development effort is currently on integrating the Monochrome Bitcoin ETF into traditional finance lending structures, with a view to significantly improving residential mortgage outcomes for bitcoin holders.”
For his part, Global X investment analyst Justin Lin maintained that what distinguishes EBTC from other funds is that investors have direct exposure to bitcoin itself.
“When you invest in our fund, you are functionally a bitcoin owner … By contrast, many other bitcoin ETFs don’t give you that access,” he told InvestorDaily, adding that other funds either hold a bitcoin ETF or use futures, meaning investors track bitcoin’s price without holding the asset directly.
Elsewhere in Global X’s market update, the Australian ETF market expanded by $10.2 billion in August to a record $299.4 billion, lifting its 12-month growth rate to 35.9 per cent.
Gold miners were the standout sector in August, with the VanEck Gold Miners ETF gaining 19.7 per cent and the Betashares Global Gold Miners ETF rising 19.3 per cent.
Aside from gold miners, the Global X Green Metal Miners ETF – which provides exposure to global companies producing critical metals such as lithium, copper, nickel and cobalt – was also a standout performer, returning 16.6 per cent over the month.
Chinese tech stocks were also among the strongest for the month, with the Global X China Tech ETF increasing by 15.1 per cent. The ETF provider attributed this growth to a revived narrative around artificial intelligence, spearheaded by domestic tech giants. Meanwhile, the Betashares Ethereum ETF increased by 14.3 per cent.
Year-to-date, gold miners and defence ETFs have shown strong returns.
The Betashares Global Gold Miners ETF (Hedged) led with a 79.1 per cent gain, followed by the VanEck Gold Miners ETF at 75.3 per cent. In defence, the Global X Defence Tech ETF saw a 57.7 per cent increase, while the VanEck Global Defence ETF returned 51.9 per cent, and the Betashares Global Defence ETF rose by 44.4 per cent.
A $12 billion increase in government defence spending, aligning with global trends, has recently brought defence ETFs into focus.
