Canada’s Bitcoin ETF Starts Trading With A Purpose
The Purpose Bitcoin ETF opened for trading on Thursday and was the biggest traded ETF on the Toronto TSX that day with over 10 million shares changing hands.
The Purpose ETF witnessed over $80 million in volume in its first hour of trading, and although it’s early days ‘trading volumes were well above an ETF’s typical first day in Canada,’ according to Bloomberg Intelligence analyst James Seyffart.
What is arguably more interesting, however, is the ETF didn’t have a second day drop-off, like other debuting ETFs and instead had a 40% jump on its opening day, and x3 more than any other ETF that day.
Bloomberg ETF reporter Eric Balchunas took to Twitter to eulogise about the speed at which the Purpose ETF had come out of the blocks, claiming it would ‘likely reach $1 billion by the end of next week.’
Balchunas went further saying the ETF could become ‘the biggest ETF in Canada in 20 days’ although, the Bloomberg reporter did caution a ‘nasty sell off’ was possible.
‘Stunning. The Canada Bitcoin ETF $BTCC already has collected $421m in assets first two days (crushing our estimate),’ said Balchunas. ‘Proportionally speaking it is the equiv of a US ETF taking $8b in first two days. If it were to keep up this pace it will be the biggest ETF in Canada in 20 days.’
The Purpose Bitcoin ETF
The Purpose Bitcoin ETF launched on Thursday and has exceeded all expectations. As stated, if it continues to grow like this, it will become the biggest ETF on the Toronto TSX pretty soon.
According to the Purpose Investments website, the fund is currently backed by 6036.701599 bitcoins, which are held in secure, cold storage.
The fund only invests in and holds 100% physically settled Bitcoin, and will continue to buy or sell Bitcoin proportionately to the quantity of purchased shares.
Purpose Investments founder and CEO Som Seif said in a press release that Purpose believes Bitcoin has a promising future and is poised for continued growth and adoption.
‘We believe Bitcoin, as the first and largest asset in the emerging cryptocurrency ecosystem, is poised to continue its growth trajectory and adoption as an alternative asset, further cementing the investment opportunity it presents.’
Canada First Out Of The Blocks
Canada isn’t waiting for other leading regulators to introduce Bitcoin ETFs, as it sees its opportunity to gain a major foothold in the global race for Bitcoin ETF supremacy.
The Ontario Securities Commission gave the green light on two Bitcoin ETFs last week, making them the first of Bitcoin only ETFs.
The Purpose ETF launched on Thursday, and exceeded all expectation, while the second ETF – Evolve, launched on Friday.
The Evolve Bitcoin ETF is currently playing second fiddle to Purpose. With only $1.21 AUM the Evolve ETF isn’t of much significance, but a 7% 24-hour increase on Friday is higher than the Purpose ETF’s 4%.
And while a US ETF will attract higher volumes, the longer the SEC lags the further the US will have to catch up. It’s not a coincidence the Grayscale Bitcoin Fund (GBTC) is also traded out of Canada.
The Bitcoin ETF Race Is Heating Up
Canada is certainly out of the blocks first but the race for more Bitcoin ETFs is heating up. There has always been questions about when the US SEC will grant permission for an ETF, and with a new blockchain friendly chairman ready to take the helm, we should expect one within the next 6-12 months.
There are many Bitcoin ETPs in Europe, but they’re not ETFs and won’t bring as much capital into the Bitcoin market. None of them come close to Grayscale’s GBTC either, and with the EU known to be bureaucratingly slow a Bitcoin ETF there is unlikely any time soon.
With the UK recently divorced from the EU and Brexit now fully confirmed, it’s perfect for them to push for more Bitcoin adoption. London has always been a major financial centre and it will look to take advantage of its new found independence, so a British Bitcoin ETF is likely this year.
Whichever market is next to introduce an ETF isn’t clear. However, the race for Bitcoin ETFs is heating up, and in the next 2-4 years we will likely see every major market offering them.