Canada's Securities Regulator Approves Bitcoin Mutual Fund Listing
Canada's financial securities regulator has approved the listing of a Bitcoin ETF.
Key Takeaways
- Canadian securities regulators have approved an open-ended Bitcoin ETF by Purpose Investments.
- The Bitcoin ETF is the first-of-its-kind physically settled product, closely resembling a mutual fund.
- Another ETF application backed by Winklevoss twins is also pending approval from Canadian authorities.
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The Ontario Securities Commission, Canada’s SEC-equivalent, has ratified the initial public offering (IPO) for a Bitcoin mutual fund product.
New Bitcoin Mutual Fund in Canada
The company filing system in the country SEDAR contains the prospectus of the Bitcoin ETF launched by Purpose Investments. The “Purpose Bitcoin ETF” is the first direct custody Bitcoin ETF in the world. The prospectus notes that the fund has the ability to invest in assets “not permitted for conventional mutual funds.” In this case, BTC.
Canada’s largest securities exchange, the Toronto Stock Exchange (TSX), has “conditionally approved” the ETF listing. The stock tickers for the mutual fund on TSX will be BTCC, BTCC.B, and BTCC.U.
The fund will trade alongside similar Bitcoin ETFs from 3iQ Digital Asset Management.
Nevertheless, there are subtle differences between the two ETFs in Canada. Purpose’s BTC trust is open-ended, meaning shares will be issued as long as there’s demand; they’re physically settled continuously.
On the other hand, 3iQ sold a fixed amount of shares at launch in April, a characteristic of a closed-end fund.
The former is unlikely to attract premiums and discounts on actual BTC prices, which may attract many retail investors. Som Seif, founder and CEO of Purpose Investments, noted in the press release:
“Purpose Bitcoin ETF will change the landscape for investors by giving them a simple, efficient and affordable way to directly access the cryptocurrency.”
Purpose Investment has classified the Bitcoin ETF as an instrument for “long-term capital appreciation.”
Canada just approved a #bitcoin ETF! Nowhere near as big as US markets, but a step in the right direction for sure.
— Lark Davis (@TheCryptoLark) February 12, 2021
Purpose appointed Cidel Trust Company as their BTC custodians. Reportedly, another Bitcoin mutual fund application by Arxnovum Investments Inc., backed by the famous Winklevoss twins in the U.S., is also due approval soon.
Disclosure: The author held BTC at the time of press.
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