Toronto-based Purpose Investments Inc. has received approval from Canadian securities regulators to issue a direct custody Bitcoin ETF — the first of its kind.
Purpose Bitcoin ETF (BTCC) will invest in physically settled Bitcoin directly, instead of using derivatives.
“Bitcoin holdings are kept in ‘cold storage’ — the most secure custody solution in the market,” Purpose stated in a release. New York–based Gemini Trust Company is the fund’s sub-custodian, and CIBC Mellon Global Securities Services Company acts as fund administrator.
Purpose Investments worked “in close coordination with the Ontario Securities Commission [OSC] through a confidential filing process” to launch the fund, the company stated. The fund’s prospectus was filed under the passport system, meaning the OSC’s approval applies in the 12 other provinces and territories.
“The OSC was a crucial working partner in the launch of Purpose Bitcoin ETF and we are grateful for their willingness to work with us through this process,” said Som Seif, founder and CEO of Purpose Investments, in the release. “Their co-operation and guidance made it possible for us to move forward on getting this novel ETF into the hands of investors.”
The ETF has a 1% management fee and its daily net asset value will be based on the TradeBlock XBX Index. A Purpose spokesperson said that the firm estimates the fund will begin trading next week on the Toronto Stock Exchange.
Today’s launch follows product releases from 3iQ Corp., CI Global Asset Management Inc. and Ninepoint Partners LP over the past year.
Other fund manufacturers that have filed preliminary prospectuses for Bitcoin ETFs are Horizons ETFs Management (Canada) Inc., Accelerate Financial Technologies Inc., Arxnovum Investments Inc. and Evolve Funds Group Inc.
Bitcoin’s price has been volatile. After dipping below $6,000 per unit in March of last year, the price ping-ponged between $30,000 and $40,000 in January. The currency soared again after Tesla Inc. announced earlier this month that it had bought $1.5-billion worth of Bitcoin. (All prices are in U.S. dollars.)
With files from Fiona Collie