Posted 3 weeks ago | Catoshi Nakamoto
The first publicly traded Bitcoin exchange-traded fund (ETF) in North America and the world has been approved in Canada held by Purpose Investments, an asset management company with more than $10 billion in assets under management, its website details.
According to a document that was filed by Purpose Investments with the Ontario Securities Commission (OSC), which was registered under a Multilateral Instrument passport system in multiple Canadian jurisdictions, including — British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Northwest Territories, Yukon, and Nunavut.
The alternative mutual fund will be called the Purpose Bitcoin ETF, and tradeable on the Toronto Stock Exchange or TSX under the ticker BTCC.U. What sets the Purpose ETF apart from other trade funds is that it directly holds Bitcoin. Every dollar coming into the fund means it will have to purchase a dollar worth of Bitcoin. Another difference is in an ETF; shares are issued continuously while a close-ended fund issue shares only during the initial public offering. The ETF states that it won’t speculate on the short term price of Bitcoin, and will instead focus on the long term, Bloomberg reported.
The company says this is “the first direct custody Bitcoin ETF in the world.”
According to a fact sheet shared by Purpose Investments, the fund is eyeing investors who are seeking long-term capital growth and have labeled the fund “high risk.” The Fund will also seek to replicate the price of Bitcoin’s price, minus the ETF’s fees and expenses.
“The Fund has been created to buy and hold substantially all of its assets in long-term holdings of Bitcoin and seeks to provide holders of ETF Units (“Unitholders”) with the opportunity for long-term capital appreciation,” the company prospectus reads.
Cidel Trust Company will be the custodian of the ETF, while Tyler and Cameron Winklevoss’ Gemini Trust Company will be the sub-custodian. Ernst and Young will be the auditor of the ETF.
ETFs contain a basket of investments, similar to mutual funds, but trade on exchanges much in the same way stocks do. An ETF’s risk is based on what kind of underlying assets it has, and the bitcoin ETF is considered “high risk.”
Those seeking a “steady source of income” from their investment are advised against buying into Purpose Bitcoin’s ETF.
The ETF will have a 1 percent management fee and could launch as early as next week, but there’s no set date at this point.
“Investors are already saying we’re going to own this asset, one way or the other.” Som Seif, Purpose Investments’ founder, and CEO told Yahoo Finance Canada.
“I think regulators are probably recognizing that it’s probably better to put that into a regulated structure than a non-regulated structure.”
Last year, an Ethereum exchange-traded trust was approved for trading on the Toronto stock exchange (TSX), under the ticker, QETH.U for the Ethereum Trade Fund, by Canadian digital asset investment manager 3iQ as Bitboy Crypto reported. Elsewhere in the U.S., VanEck has filed its own ETF fund for Bitcoin for 2021, which has yet to be accepted by the U.S. Security Exchange Commission. Several firms have filed and failed to gain approval for a Bitcoin ETF in the past, with the SEC citing security concerns.
Although, approval in Canada for the Purpose Bitcoin ETF gives hope that the SEC might consider approving VanEck or another ETF fund here in the U.S.
Bitcoin is currently trading at [FIAT: $49,304.68] UP +5.3% in the last 24 hours, according to Coingecko at the time of this report.