Canada Approves First Bitcoin ETF
The first Bitcoin exchange traded fund (ETF) has finally been approved in Canada. The Purpose Bitcoin ETF (BTCC.U) won approval after the Ontario Securities Commission gave the green light, making it the first of its kind in North America.
The Purpose Bitcoin ETF will trade on the Toronto Stock Exchange (TSX), and investors will be able to purchase with either Canadian or US dollars.
The fund will purchase only Bitcoin (BTC), and it will replicate the performance of the Bitcoin price minus the ETF’s fees and expenses.
Investors seeking long-term capital growth, with a tolerance of “high risk” are the type of investors the company is targeting for its Bitcoin ETF, according to the Purpose Bitcoin ETF fact sheet.
According to the prospectus, the Purpose Bitcoin ETF will ‘invest in and hold substantially all of its assets in long-term holdings of Bitcoin, and will provide holders of ETF Units with the opportunity for long-term capital appreciation.’
Cidel Trust Company, a subsidiary of Cidel Bank Canada, is to be the ETF’s custodian, while Cameron and Tyler Winklevoss’ Gemini will serve as the fund’s sub-custodian.
Investors will be able to buy or sell the ETF units on the TSX through registered brokers and dealers in the Province or Territory where the investor resides, and will be subject to individual brokerage commissions.
Canada Leading The Way With Bitcoin ETFs
A Bitcoin ETF has been the “holy grail” for many Bitcoin investors for the past couple of years. There have been many attempts to launch one in the US, but the US SEC denied each proposal.
Europe seems to be friendlier with Bitcoin traded products, as they have several Bitcoin ETPs on exchanges across the continent, and Bermuda has a crypto ETF, but the Purpose Bitcoin ETF is the first BTC only ETF.
And it appears Canada might be ready to roll more Bitcoin ETFs out as the regulators there appear to be moving towards further approvals.
The Accelerate Bitcoin ETF from Accelerate Financial Technologies, and the Arxnovum Bitcoin ETF from Arxnovum Investments, and ETF proposals from Evolve Funds Group Inc., Horizons ETFs Management (Canada) Inc are all being considered by Canadian regulators.
Bloomberg senior analyst Eric Balchunas, said the Prospectus Bitcoin ETF approval in Canada is a ‘good sign’ for the US market, which he said usually follows its more liberal northern cousin.
‘Canada approves first bitcoin ETF,’ said Balchunas. ‘Gotta love their liberal regulators, or perhaps they’re normal and SEC too conservative. Either way US usually follows shortly after. Good sign for US Bitcoin ETF.’
Bitcoin ETFs – An Inevitability
Bitcoin ETFs are inevitable, and it’s surprising it has taken this long for the first one to be approved.
With the Grayscale Bitcoin Fund (GBTC) also trading out of Canada, it’s clear the Canadian regulators are friendlier towards Bitcoin products.
However, with Jay Clayton out of the way at the head of the US SEC and blockchain friendly Gary Gensler ready to take the helm, many expect a Bitcoin ETF to be approved in the US.
A Bitcoin EF on all major exchanges will happen, and I expect we will see more this year.
Will it be the US? Well, the SEC had better hurry or HFSP.