Canada has a number of cryptocurrency ETFs (Getty)
Cryptocurrency investors in the US are celebrating a milestone today with the first day of trading of the first Bitcoin ETF on the New York Stock Exchange.
But Canada has been at the forefront of ETF options for US investors for some time.
The ProShares Bitcoin Strategy ETF (BITO) is based on futures contracts, which do not always closely track the physical price of Bitcoin. The Securities Exchange Commission has not approved an ETF that directly holds physical bitcoins (BTC-USD).
Greyscale has a trust (GBTC) that physically holds bitcoin. Due to the trust structure, there may be discrepancies between the fund’s net asset value and the bitcoin price. On Tuesday, Greyscale submitted its conversion to an ETF.
Canadian regulators earlier this year approved ETFs that directly hold Bitcoin. The first was launched by Purpose Investments on the Toronto Stock Exchange in February. The Canadian dollar-denominated non-currency-hedged version trades under the ticker symbol BTCC.B. American investors wishing to use greenbacks have the US dollar-denominated version ticked as BTCC.U.
“An official ETF structure provides daily liquidity and marking for market and market makers and its sole role is to ensure that the price of the ETF and the price of the ETF’s net asset value are directly linked and traded throughout the day going away,” Som Seif, founder and CEO of Purpose Investments, told Yahoo Finance Canada in February.
“If you only hold futures and roll the futures, there is a risk that Bitcoin will underperform over time as it is priced into a futures price as opposed to a current price.”
barriers to entry
Waseem Mamlouk, vice president of capital markets at Nimbus DeFi, says a number of factors may be holding US investors back.
“There can be custody concerns that the actual asset for them is traded through a foreign-owned investment firm and there have always been security issues related to crypto custody, so that would be the number one reason, but there are other reasons as well safe for that, including easy access, just because there are trading offices and partners in their own city who can now provide these services,” he told Yahoo Finance Canada.
The story goes on
There may also be more legwork depending on the broker.
“Let’s say an individual investor has an account with Robinhood, Fidelity, or Schwab in the US, they couldn’t just buy it themselves,” Vlad Tasevski, chief operating officer and head of product at Purpose Investments, told Yahoo Finance Canada. “You would have to go through a series of permits and make a manual phone call to the order desk.”
“Ultimately they will make it. But there are many obstacles.”
Evolve launched a similar version of these ETFs under EBIT for Canadian dollars and EBIT.U for US dollars in the same week. Next came the CI Galaxy Bitcoin ETF BTCX-B for Canadian dollars and BTCX-U for US dollars.
There are also a number of Ethereum ETFs (ETHH). (ETHH-U) (ETHR) (ETHR-U) (ETHX-B) (ETHX-U) a combination of Bitcoin and Ethereum (ETC) (ETC-U) and even an inverse Bitcoin ETF to bet against (BITI) (BITI- U ).
With files by Jeff Lagerquist
Jessy Bains is Senior Reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.
Download the Yahoo Finance app, available for Apple and Android.
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.