A Third Bitcoin ETF Takes Aim at North American Market

Yet another Canadian Bitcoin Exchange-Traded Fund is taking a crack at the North American market. 

CI Global Asset Manager, the subsidiary of Canadian financial company CI Financial, today filed a preliminary prospectus for a Bitcoin ETF.

The ETF would retain Mike Novogratz-owned crypto investment firm Galaxy Digital as a subadvisor and use Gemini, the cryptocurrency firm founded by Tyler and Cameron Winklevoss, as the custodian. 

CI, a Toronto-headquartered company founded in 1965, managed approximately $231.8 billion in assets as of the end of January, according to a press release. 

The ETF, if approved, would be Canada’s third after Evolve and Purpose launched their own this week. 

Purpose’s ETF launched yesterday on the Toronto Stock Exchange. It traded $80 million worth of shares in its first hour and $165 million in its first day. 

And more yet are applying. Canadian firm 3iQ filed a preliminary prospectus for a Bitcoin ETF last week. 

Why are Bitcoin ETFs important?

An ETF is an investment vehicle that sells shares in an underlying asset. Whenever someone buys a share in the ETF, the investment operators will buy some Bitcoin and store it on investors’ behalf (for a fee). 

ETFs are hotly anticipated for a couple reasons. 

First, they make it easier to trade Bitcoin on the stock market. This makes it easier for Canadian investors to get involved with Bitcoin without having to worry about storing, buying or trading the coin—a risky and complicated affair, even today. 

Second, ETFs are cheap and track the price of Bitcoin fairly effectively. Although nothing is cheaper than buying Bitcoin directly and swallowing the keys to your wallet, trading Bitcoin through regulated investment vehicles is attractive to many investors. 

ETFs are generally cheaper than other Bitcoin investment vehicles, such as the various closed-end trusts that are floating around the market. 

Such trusts, like the behemoth Grayscale Bitcoin Trust, which holds $34 billion in Bitcoin, or CI Financials’ own CI Galaxy Bitcoin Fund, use privately-invested money to snap up Bitcoin, and then sell shares in the trusts on publicly-traded markets. 

But they’re expensive: Grayscale’s Bitcoin trust, for instance, comes with an annual fee of 2% and shares often trade at a hefty premium to the Bitcoin bought with the trust’s money. CI Financial’s comes with a fee of 1.8%. By comparison, CI’s ETF costs a fee of 1%.