Revolutionizing the Investment Landscape: Canadian Crypto ETFs Take the Stage

Written By Michael Gary Scott

Exploring the World of Canadian Crypto ETFs

Cryptocurrencies like Bitcoin and Ethereum have opened up new avenues for wealth accumulation and storage. Investors are increasingly turning towards financial instruments such as crypto exchange-traded funds (ETFs) as a means of capitalizing on this digital wave.

Canada made its mark by debuting Bitcoin and Ethereum ETFs in 2021, providing investors with the opportunity to park their gains in tax-advantaged accounts, including tax-free savings accounts and registered retirement savings plans.

The Rising Demand for Crypto ETFs

The appetite for a Bitcoin investment vehicle that combines the tradability and liquidity of an ETF has been palpable since 2021. The allure of these instruments is undeniable, as highlighted by Ross Mayfield of Robert W. Baird & Co.

Interest in Bitcoin ETFs has only intensified over time. Sean Farrell of Fundstrat projected in mid-2023 that the Bitcoin ETF market has the potential to outstrip the asset value of precious metals ETFs, potentially crossing the $300 billion threshold to become a dominant force in the financial realm.

Unveiling the Top Canadian Crypto ETFs

As the enthusiasm for cryptocurrency ETFs continues to soar, it is prudent to examine the array of options available in Canada. Below is a rundown of 13 Canadian crypto ETFs based on assets under management, accurate as of August 23, 2024.

1. Purpose Bitcoin ETF (TSX:BTCC)

Assets under management: C$2.3 billion

Enter the world’s inaugural physically backed Bitcoin ETF – the Purpose Bitcoin ETF. Launched in February 2021, this pioneering ETF managed by Purpose Investments is bolstered by 26,983.5 Bitcoins securely stored in cold storage, offering an innovative gateway for investors to trade Bitcoin sans the need for a digital wallet.

2. CI Galaxy Bitcoin ETF (TSX:BTCX.B)

Assets under management: C$754.17 million

The CI Galaxy Bitcoin ETF, a brainchild of the collaborative efforts of Galaxy Fund Management and CI Global Asset Management, hit the market in March 2021. Boasting one of the lowest management fees at 0.4 percent, this ETF provides investors with exclusive exposure to Bitcoin through a secure institutional-quality platform.

3. Fidelity Advantage Bitcoin ETF (TSX:FBTC)

Assets under management: C$506.30 million

Introducing the latest entrant to the Bitcoin ETF arena – the Fidelity Advantage Bitcoin ETF. Launched in November 2021, this ETF, with holdings secured in Fidelity’s cold storage, slashed its management fee in January 2024 to a mere 0.39 percent, underscoring its commitment to provide investors with cost-effective exposure to Bitcoin.

4. CI Galaxy Ethereum ETF (TSX:ETHX.B)

Assets under management: C$455.29 million

The CI Galaxy Ethereum ETF, a product of the CI and Galaxy collaboration, rolled out in April 2021, offering investors a direct line to the Ethereum price through Ether holdings stashed in cold storage. With its management fees clocking in at 0.4 percent, this ETF paves the way for investors to tap into the dynamic world of Ethereum.

5. Purpose Ether ETF (TSX:ETHH)

Assets under management: C$369.30 million

The Purpose Ether ETF, a custodian of 98,611 Ether since its inception in April 2021, provides investors with exposure to the daily price gyrations of Ether tokens, all securely stored in cold storage. With a management fee of 1 percent, this ETF represents a sophisticated avenue for harnessing the potential of Ether.

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Exploring Top Crypto ETFs in Canada

Exploring Top Crypto ETFs in Canada

The Rise of Crypto ETFs in the Canadian Market

As the digital currency market continues to evolve, Canadian investors are increasingly turning to Exchange-Traded Funds (ETFs) to gain exposure to cryptocurrencies like Bitcoin and Ether. These ETFs offer a convenient and regulated way for investors to participate in the volatile yet potentially rewarding world of digital assets.

The Landscape of Top Crypto ETFs

Let’s delve into some of the prominent crypto ETFs available in the Canadian market:

3iQ CoinShares Bitcoin ETF (TSX:BTCQ)

With assets under management totaling US$299.41 million, the 3iQ CoinShares Bitcoin ETF tracks the price movement of Bitcoin and stores its assets in cold storage. Launched in March 2021, this ETF charges a management fee of 1 percent.

Evolve Bitcoin ETF (TSX:EBIT)

Partnering with cryptocurrency experts, Evolve ETFs introduced the Evolve Bitcoin ETF with assets under management of C$223.38 million. Launched in response to the Purpose Bitcoin ETF, it offers exposure to Bitcoin using the CME CF Bitcoin Reference Rate.

Purpose Bitcoin Yield ETF (TSX:BTCY)

The Purpose Bitcoin Yield ETF implements a covered call strategy to generate yield for investors. This ETF provides a unique way to earn income from Bitcoin price movements through call options.

Purpose Ether Yield ETF (TSX:ETHY)

Similar to its Bitcoin counterpart, the Purpose Ether Yield ETF enables investors to generate yield while investing in Ether. By lending Ether to institutional borrowers, investors can benefit from monthly interest distributions.

Evolve Ether ETF (TSX:ETHH)

The Evolve Ether ETF simplifies investing in Ether, using the CME CF Ether-Dollar Reference Rate for pricing. Like its Bitcoin counterpart, this ETF charges a 0.75 percent management fee.

3iQ CoinShares Staking Ether ETF (TSX:ETHQ)

Building on the success of its Bitcoin ETF, 3iQ Digital Asset Management launched the CoinShares Ether ETF in April 2021. With assets under management of C$62.3 million, this ETF aims to provide exposure to Ether’s price movements.

Evolve Cryptocurrencies ETF (TSX:ETC)

The Evolve Cryptocurrencies ETF, the first multi-cryptocurrency ETF in Canada, offers combined exposure to Bitcoin and Ether. This ETF allows investors to diversify their crypto holdings based on market capitalization.

Fidelity Advantage Ether ETF (TSX:FETH)

Coming to market in September 2022, the Fidelity Advantage Ether ETF stores its holdings in cold storage and carries a management fee of 0.4 percent. This ETF complements Fidelity’s successful Bitcoin offering.

Conclusion

The growth of crypto ETFs in Canada reflects the increasing demand for digital assets among investors. These funds provide a regulated and convenient way to gain exposure to cryptocurrencies while managing risk. As the market continues to evolve, investors have an expanding array of options to navigate the crypto landscape.