Canadian regulator clears launch of world’s first bitcoin ETF

Nancy

Canada is soon to be the first, and so far the only, country with the accepted Bitcoin ETF, which stands for the Bitcoin exchange-traded fund. The official statement regarding the cleared position to launch the world’s first-ever Bitcoin ETF was published several days ago. The new publication provides investors with the ability to get better access to the cryptocurrency that has boomed all over the globe and continues to enhance its sparkles on us. 

The main body to approve the currency in Canada was the Ontario Securities Commission. The Toronto-based asset management company Purpose Investment INC. On this note, it is worth mentioning that the Bitcoin ETF will be the world’s first to invest directly in physically settled Bitcoin, with no derivatives and no contract for differences. This will enable investors to have very easy and efficient access to the emerging asset class of the cryptos. 

So far, the only option for the investors to trade with the cryptos is via the futures contracts on the CME derivative exchanges. With the Bitcoin ETF, the investors will be able to buy closed-end investment funds, such as the Bitcoin Fund on the Toronto Stock Exchange. Not only is this great news from the first Bitcoin ETF existence, but it will also attract more investors to the Toronto Exchange. 

Advantages 

Considering the complexity of Bitcoin, as well as the constant price fluctuation of the cryptocurrency, the Bitcoin ETF will not affect the Bitcoin price in any way. Moreover, it is offered to investors with one considerable benefit – low fees. Bitcoin has proven to us all that the price of the asset can not really be predicted, and furthermore, it can not even be calculated. 

During the global pandemic, Bitcoin has reached an all-time high price, peaking at the value of $48,975. This was another record after the 8th of January, where Bitcoin made us all think twice whether or not we want to invest in anything else than the crypto itself. So far, it has gained 63% this year and soared by roughly 1,130% since the middle of the March of the previous year.

A number of the factors have definitely contributed to the popularity of Bitcoin. One of those was the announcement by Elon Musk, the CEO and founder of Tesla. Musk revealed on Monday that the company had bought $1.5 billion worth of the cryptos and would soon accept crypto as one of the payment methods for its cars. In the meantime, the cryptos have been gaining acceptance among other mainstream financial companies as well. 

While North America is definitely giving a green light to the new Bitcoin ETF to take its turn, the US is still resistant to meeting the crypto-friendly regulations. The US has previously been noticed in the BTC ETF offers, though there are some ongoing issues that the country keeps facing. Among the topics that The Securities and Exchange Commission appears to focus on at the moment, the potential market manipulations are still the topic of custody and verification. 

As far as the BTC ETF is still very new, some unanswered questions regarding the topic still exist. Those questions include the total fees and the maximally low fee statement it can offer to the customers. While most of the stuff should be accepted and verified in the process of implementation, the US might have another thought on the introduction of the BTC ETF. 

The implementation procedure 

The document which was published on Thursday states that the approval of the Bitcoin ETF happened through the OSC, which was filed under a Multilateral Instrument passport system in most of the Canadian jurisdictions. The jurisdictions which from now on should be accepting the BTC ETF, are the following: British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Northwest Territories, Yukon, and Nunavut.

At the current moment, the fund seeks to replicate the performance of the Bitcoin price, minus the fees and expenses. The information is publicly available with the sheet posted by the Canadian-based asset, manager, also above mentioned purpose Investments. The document once again outlines that the fund will not contribute to the Bitcoin price speculation in any term. 

The Fact Sheet

Bitcoin ETF is not made for investors who are seeking short-term capital growth. Although the BTC ETF has a relatively well-adjusted risk rate, people that are less tolerant to the high risks are not encouraged to invest in the fund. The risk in the Bitcoin ETF is calculated based on what kind of underlying asset it has. The investors seeking constant and steady income are also not encouraged to invest in the Bitcoin ETF. 

One way or another, this should be a completely new level in the crypto industry. While Canada is definitely one of the leading countries in this field, perhaps it will give the US a good incentive to overview its more conservative approach towards the matter.