First Publicly Traded Bitcoin ETF Approved in North America
The first publicly traded Bitcoin exchange-traded fund (ETF) has been approved in North America by Canada's financial regulator, the Ontario Securities Commission (OSC).
The receipt of approval from the OSC was filed under a Multilateral Instrument passport system in multiple Canadian jurisdictions, as per a decision document from Sedar.
The fund is expected to be listed on the Toronto Stock Exchange and will be managed by Purpose Investments.
According to the fact sheet, the fund seeks to mirror the performance of the price of Bitcoin minus the ETF expenses and fees but won't speculate on the short-term changes in the price of the digital currency. The annual management fee for the fund is 1% of the value of Bitcoin, while the expenses of the fund include a management fee along with operating and trading costs.
The Bitcoin ETF is for those investors who want capital growth over the long term but can also tolerate high risk, states the fact sheet. As such, those seeking a “steady source of income” are advised not to buy the fund.
Just yesterday, the Bitcoin price surged to a new ATH of $49,000, up 65% YTD.
The Purpose Bitcoin ETF, managed by Purpose Investments, will use Cidel Trust Company based in Calgary, Alberta Canada to custody the assets of the funds. As per the document.
“Cidel Trust Company is the custodian of the assets of the Fund. The Custodian will be responsible for safekeeping of the assets of the Fund (other than the Bitcoin held in the Fund’s portfolio)”
According to a letter found on Sedar, Ernst & Young will be the auditor for the fund.
The Bitcoin will actually be custodied by the Winklevoss Twin's Gemini Trust Company. According to the document:
“Gemini Trust Company, LLC acts as sub-custodian of the Fund in respect of the Fund’s holdings of Bitcoin pursuant to a sub-custodian agreement between the Custodian, the Manager on behalf of the Fund and the Sub-Custodian “
Perhaps other Bitcoin ETF requests will be considered for approval now. Evolve Funds Group Inc., Horizons ETFs Management (Canada) Inc, Arxnovum Investments Inc., and Accelerate Financial Technologies Inc. have all filed for their own and are eagerly awaiting approval.
The crypto market is excited about this green light to a Bitcoin ETF from the regulators, with Eric Balchunas, a senior analyst at Bloomberg, tweeting:
“Gotta love their liberal regulators, or perhaps they’re normal and SEC too conservative. Either way US usually follows shortly after. good sign for US bitcoin ETF.”
In other news, US SEC Commissioner, Hester Peirce, said on Thursday that the market is ready for a Bitcoin ETP. With people eager to trade a Bitcoin ETP, “if we don’t give them the natural way, which I think would be an ETP, they are going to look for other (less optimal) ways to do it,” she said.