Fidelity Clearing Canada will become the first Bitcoin trading and custody platform designed for institutions, following regulatory approval from the Investment Industry Regulatory Organization in the country.
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- Differences Between the Purpose Fund and the Evolve Fund
Canadian regulator clears launch of world’s first bitcoin etf
TORONTO, February 16, 2021 – Evolve Funds Group Inc. (“Evolve”) is pleased to announce that it has filed a final prospectus to launch the Bitcoin ETF (“EBIT” or the “ETF”). EBIT is one of the world’s first physically settled Bitcoin ETFs and will launch on the Toronto Stock Exchange (“TSX”), subject to TSX approval. EBIT is designed to provide investors with exposure to the world’s leading cryptocurrency bitcoin, by investing directly in bitcoin.
“The Bitcoin ETF is exciting news for investors,” says Raj Lala, President and CEO, Evolve ETFs. “Investors will be able to trade bitcoin on a regulated stock exchange. It will be as simple as buying shares through their bank or brokerage. Unlike the technical challenges of investing in bitcoin, units of EBIT will be safely transacted via a familiar brokerage investing platform.
Since then, crypto-based ETF products have been quickly gaining traction, as roughly 40 digital asset ETFs are awaiting approval in the United States.
According to Scott Mackenzie, the president of Fidelity Clearing Canada, the demand for investing in cryptocurrencies among institutional investors has been growing rapidly, and they have been searching for a regulated dealer platform for accessing the new asset class.
Institutional investors based in Canada, including mutual funds and ETFs, were previously required to access custodians based in the United States. Fidelity’s new service could allow investors to directly invest in Bitcoin.
According to the latest report by CoinShares, Bitcoin investment products among institutions continue to dominate inflows while the price of the bellwether cryptocurrency continues to rise.
Canadian clears launch world first bitcoiner
Next Steps in Crypto: Increased Commercial Adoption and U.S. Regulatory Response
Regulatory clearance for the world’s first Bitcoin ETFs by Canadian securities regulators does not come in a vacuum.
Indeed, regulators around the globe are grappling with the same issues raised by blockchain technology, digital currencies and decentralized finance. Generally, Canadian and U.S. securities regulators have viewed Bitcoin as a type of commodity while other jurisdictions have taken action to treat the cryptocurrency as a currency for taxation purposes.
Canadian clears launch world first bitcoins
To achieve its investment objective, the Purpose Fund invests in and holds substantially all of its assets in long-term holdings of Bitcoin. Similarly, the Evolve Fund’s investment objective is to provide holders of its units with exposure to the daily price movements of the U.S. dollar price of Bitcoin while utilizing the benefits of the creation and redemption processes offered by the ETF structure. The intention in both cases is to provide unitholders with a secure and convenient alternative to a direct investment in Bitcoin and potentially facilitate the holding of Bitcoin by investors that otherwise would not be able to acquire the cryptocurrency.
Both funds constitute an “alternative mutual fund” within the meaning of NI 81-102 – Investment Funds (“NI 81-102”).
Canadian clears launch world first bitcointalk
EBIT will provide daily liquidity, transparency and security for directly purchasing bitcoin through a regulated ETF structure.”
EBIT will provide investors with exposure to the daily price movements of the U.S. dollar price of bitcoin. The ETF will not seek exposure through derivatives or futures contracts and will be backed directly by physically settled bitcoin holdings. The ETF’s daily NAV will be based on the CME CF Bitcoin Reference Rate, a once-a-day benchmark index price for bitcoin denominated in U.S.
Bitcoin ETFTSX SymbolUnhedged ETF UnitsEBITUSD Unhedged UnitsEBIT.U
“EBIT will directly own bitcoin on the Bitcoin blockchain in a cold wallet,” says Elliot Johnson, Chief Investment Officer and Chief Operating Officer, Evolve ETFs.
Investors will have confidence in the secure investment process for the Bitcoin ETF. We are very pleased to be working with best-in-class cryptocurrency experts including, Gemini Trust Company, CF Benchmarks, Cidel Trust Company, and CIBC Mellon.”
Related Link: http://www.newswire.ca/en/releases/archive/February2021/16/c0630.html
About Evolve Funds Group Inc.
With $1.7 billion in assets under management, Evolve is one of Canada’s fastest growing ETF providers since launching its first ETF in September 2017. Evolve is a leader in thematic ETFs and specializes in bringing disruptive innovation ETFs to Canadian investors.
Evolve’s suite of ETFs provide investors with access to: (i) long term investment themes; (ii) index-based income strategies; and (iii) some of the world’s leading investment managers.
Fergal Smith, David Randall
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TORONTO (Reuters) – Canada’s main securities regulator has cleared the launch of the world’s first bitcoin exchange traded fund, an investment manager said on Friday, providing investors greater access to the cryptocurrency that has sparked an explosion in trading interest.
The Ontario Securities Commission has approved the launch of Purpose Bitcoin ETF, Toronto-based asset management company Purpose Investments Inc. said in a statement. The OSC confirmed the approval in a separate statement to Reuters.
“The ETF will be the first in the world to invest directly in physically settled Bitcoin, not derivatives, allowing investors easy and efficient access to the emerging asset class of cryptocurrency,” Purpose Investments said.
Investors have been able to trade bitcoin using futures contracts on the CME derivatives exchange.
Purpose Investments is proud to be working with Gemini Trust Company, LLC as sub-custodian and CIBC Mellon Global Securities Services Company as fund administrator to provide investors with confidence regarding the safe and effective purchase, settlement, custody of Bitcoin and administration of the ETF.
Purpose Investments worked in close coordination with the Ontario Securities Commission (OSC) through a confidential filing process through a series of meetings and presentations over the course of many months to finalize the launch of the ETF.
“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.
Purpose Units”) The Purpose Units are issued and distributed on a continuous basis and there is no maximum number of Purpose Units that may be issued. By contrast, the Evolve Fund does not have currency-hedged units. Instead, the Evolve Fund has one class of U.S. dollar-denominated unhedged units and one class of Canadian dollar-denominated unhedged units.
As of the date of this article, the Purpose Units have commenced trading, and the Evolve Units are expected to trade, on the Toronto Stock Exchange.
Another notable difference between the funds is the method of calculating each fund’s respective net asset value (“NAV”). Although the same valuation agent is engaged by each fund, it uses different Bitcoin price benchmarks to calculate the applicable NAV.
Upon approval of a Bitcoin transaction, the custodian will be notified and payment for the trade is settled. Once the sub-custodian receives the Bitcoin on behalf of the applicable fund, the manager places the fund’s Bitcoin in cold storage, ensuring that such Bitcoin is allocated to the fund’s account on a segregated basis with the sub-custodian.
Differences Between the Purpose Fund and the Evolve Fund
Two notable differences between the two funds relate to their capital structure and initial method of calculating net asset value.
Pursuant to the Purpose Fund’s declaration of trust, the Purpose Fund has three authorized classes of exchanged-traded units, as follows: (i) ETF units denominated in Canadian dollars; (ii) ETF non-currency hedged units denominated in Canadian dollars; and (iii) ETF non-currency hedged units denominated in U.S.