The Canadian investment firm Purpose Investments announced on February 11 that it had been authorized by the securities regulators of that country to launch what they describe as “the first Bitcoin Listed Investment Fund (ETF) of direct custody in the world”. The ETF is designed to provide investors with exposure to bitcoin, through direct investment in that cryptocurrency, with physical settlement.
Purpose Investments announced in a press release that the ETF offers investors investors access bitcoin “without the associated risk of self-custody in a digital wallet.” The firm maintains that it worked in coordination with the Ontario Securities Commission (OSC) in a series of meetings and presentations in recent months to secure the launch of the ETF. The OSC on Thursday approved the listing on the Toronto Stock Exchange (TSX) of the Purpose Bitcoin ETF fund, with the symbol BTCC, the firm said.
Bloomberg analyst Eric Balchunas, specialist in ETF, stated that Canada has a history of previously outperforming the United States in regulatory approval of ETFs. “We think this is good news for the hopes of Bitcoin in the United States,” said Balchunas. There is currently a Bitcoin ETF application with the SEC, as reported hereby, by VanEck Associates.
Purpose Investments will work with Gemini Trust Company as sub-custodian and CIBC Mellon Global Securities Services Company as fund manager, said the Canadian firm. “This will provide investors with confidence regarding the safe and effective purchase, settlement, custody of Bitcoin and ETF management,” said Purpose.
This Thursday, February 11, the Securities Commission Ontario published the certification of receipt of the ETF prospectus, which will be marketed in twelve Canadian provinces, including British Columbia, Alberta, Manitoba, and Quebec.
Bitcoin ETFs will compete with current funds
A noticeable difference of this ETF with respect to the Bitcoin funds that operate in the United States, is the low commission and the absence of premiums on the price of BTC in the market. The commission of this ETF, according to the prospectus, is 1% per annum of the daily average of BTC in the ETF units purchased.
In the case of Grayscale’s bitcoin fund (GBTC), in addition to the 5% annual commission, the fund’s shares present a significant percentage of premium on the value of BTC in each share, as reported by CriptoNoticias. GBTC premiums normally exceed 20% of the price of BTC.
This Thursday, February 11, the commissioner of the US Securities and Exchange (SEC), Hester Peirce, said that the country is ready for an exchange-traded product (ETP) of Bitcoin, which was reported here. ETPs are traded on exchanges, similar to stocks, and their prices are derived from the underlying investments they track.