The first Bitcoin ETF was approved by Canadian regulators. On Feb. 11, the Ontario Securities Commission has granted its approval for Purpose Investment Inc., the first publicly traded Bitcoin exchange-traded fund in North America.
The document was filed under the Multilateral Instrument passport system in multiple Canadian jurisdictions. As further stated in the document, the territories included are British Columbia, Alberta, Saskatchewan, Manitoba, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador, Northwest Territories, Yukon, and Nunavut.
Purpose Investments Inc. provides investment management services with more than $10 billion in assets under management. It also offers and manages traditional, alternative, balanced, and closed-end funds, as well as provides financial advisory services. Currently, it serves customers in Canada.
In a press release, Som Seif, founder, and CEO of Purpose Investments stated:
“Bitcoin has been gaining popularity among individual and institutional investors for years now, however, it remains a difficult asset to gain efficient and secure exposure to. Purpose Bitcoin ETF will change the landscape for investors by giving them a simple, efficient and affordable way to directly access the cryptocurrency.”
To provide investors safety, assure effective purchase, settlement, custody of Bitcoin, and administration of the ETF, Purpose Investment Inc. has partnered with Gemini Trust Company, LLC as sub-custodian and CIBC Mellon Global Securities Services Company as fund administrator.
Purpose Investments has worked closely with the Ontario Securities Commission (“the OSC”) through a confidential filing process. In regards to this, Sief added:
“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. Their cooperation and guidance made it possible for us to move forward on getting this novel ETF into the hands of investors.”
On September 18, 2020, Nasdaq and Brazilian fund manager of Hashdex, a cryptocurrency exchange-traded fund (ETF), was approved to trade on the Bermuda Stock Exchange.
Bitcoin ETFs are exchange-traded funds that monitor the value of Bitcoin but trade on the traditional market exchanges like NYSE or TSX and not on crypto exchanges. It allows investors to invest in bitcoin without using cryptocurrency exchanges while taking advantage of its price.
Just like any other investment, Bitcoin ETF has its own risk. ETFs, charge management fees that could lead to high management fees over time.