Investors rushing to catch the rising cost of bitcoin made up almost 20 percent of all Canadian exchange-traded fund earnings last month. Canad
Investors rushing to catch the rising cost of bitcoin made up almost 20 percent of all Canadian exchange-traded fund earnings last month.
Canadian ETFs recorded earnings of $5.8-billion from the month of February, using over $1-billion in earnings going into cryptocurrency bitcoin funds, based on data supplied by National Bank Financial.
Last month, Target Investments, the asset management arm of Purpose Financial LP, and Evolve Funds established the world’s first and second bitcoin ETFs.
Bitcoin is an electronic currency that isn’t backed by any nation’s central bank. Launched in 2009, the cryptocurrency spiked in popularity at 2017 after attaining US$20,000 before continuing greater than 85 percent in 2018. Today, the cryptocurrency has jumped to US$58,000, piquing investors’ interest once more.
Goal was the first out of the gate with a bitcoin finance trading under the ticker BTCC. The fund offered over $260-million of shares throughout its first day on Feb. 18 and became the most actively traded ETF in Canadian history with a total of $630-million in assets following its first five days of trading. The fund reach $1-billion in total funding last week.
Evolve hit on the market one day after and now has just under $60-million in funds. Underneath the ticker EBIT, the Evolve fund slashed its management fee down to 0.75 per cent from 1 per cent after a few days in the marketplace to attract more investor attention.
‘With the launch of the products, Canada has blazed a path from the highly competitive ETF jungle,” Daniel Straus, director of ETFs and financial products research at National Bank, stated in a monthly report.
‘The very first ETF ever [now iShares S&P/ / TSX 60 Index ETF] was launched in Canada [in 1990], as was the most first fixed-income ETF and also the first currency-hedged ETF. Now, we have seen North America’s very first’crypto-asset’ ETF after the asset category was born just over 10 years ago with the introduction of the bitcoin blockchain.’
The Canadian ETF market has 39 providers managing approximately $269.2-billion in funds. Despite Target surging ahead with the first mover’s advantage because of the bitcoin ETF, additional asset managers are still looking to hit the marketplace with their own versions of cryptocurrency funding.
On March 9, CI established the nation’s third bitcoin fund, CI Galaxy Bitcoin ETF. Underneath the ticker BTCX, the fund has the lowest management fee available on the marketplace at 40 basis points.
CI has been an early adopter of bitcoin with the launch last year of a closed-ended finance, CI Galaxy Bitcoin Fund, which increased US$72-million within an initial public offering. The company has filed with regulators to merge the fund using its ETF.
‘We believe that our ETF is your favorite means for investors to access bitcoin versus a closed-end finance as our ETF will reflect changes in the worth of bitcoin when providing higher convenience and cost-efficiency,’ CI chief executive officer Kurt MacAlpine said in an statement.
Additionally, alternative-investment company Ninepoint Partners LP, that launched a closed-ended bitcoin finance in January, has implemented with regulators to transfer its fund to an ETF.