Cryptocurrencies have rapidly emerged as a new avenue for wealth accumulation and preservation. As the allure of digital assets like Bitcoin and Ethereum continues to grow, investors are turning to innovative financial products such as crypto exchange-traded funds (ETFs) to navigate this dynamic landscape.
Canadian Pioneering in Crypto ETFs
In the financial world, Canada stands out as a trailblazer by introducing Bitcoin and Ethereum ETFs back in 2021. These ETFs provide investors with the unique advantage of sheltering returns in tax-advantaged accounts such as tax-free savings accounts and registered retirement savings plans, reflecting a forward-thinking approach to wealth management.
“There is a high demand for a Bitcoin product that has all the features that people love about ETFs — that they trade on an exchange, that they’re liquid,” emphasized Ross Mayfield, an investment strategy analyst at Robert W. Baird & Co., underscoring the market’s appetite for accessible investment avenues.
The Escalating Crypto Craze
Since then, interest in crypto ETFs has only escalated. According to Sean Farrell, Head of Digital Asset Strategy at Fundstrat, the Bitcoin ETF category’s potential to surpass the precious metals ETF market in terms of asset value is a testimony to the growing significance of crypto assets. The rise of Ethereum ETFs as a prominent topic mirrors the increasing adoption and integration of Ethereum’s blockchain technology.
With the stage set for a deep dive into Canadian cryptocurrency ETFs, a comprehensive look at the available options reveals a rich tapestry of 13 offerings that are currently dominating the Canadian market in terms of assets under management as of August 23, 2024.
Diving into the Top Crypto ETFs
1. Purpose Bitcoin ETF (TSX:BTCC)
Assets under management: C$2.3 billion
The revered Purpose Bitcoin ETF, hailed as the world’s first physically settled Bitcoin ETF, carved its niche since its launch in February 2021. Operated by Canadian investment powerhouse Purpose Investments, this innovative ETF allows investors to seamlessly trade Bitcoin while bypassing the need for a digital wallet, cementing its position as a pioneer in the crypto ETF landscape.
2. CI Galaxy Bitcoin ETF (TSX:BTCX.B)
Assets under management: C$754.17 million
Established in March 2021 through a collaboration between Galaxy Fund Management and CI Global Asset Management, the CI Galaxy Bitcoin ETF offers investors premier exposure to Bitcoin through a fund platform characterized by institutional quality. Notably, the ETF’s ultra-low management fee of 0.4 percent underscores its competitive edge in the market.
3. Fidelity Advantage Bitcoin ETF (TSX:FBTC)
Assets under management: C$506.30 million
As a newbie on the block, the Fidelity Advantage Bitcoin ETF entered the market in November 2021 with a security bolstered by Fidelity’s renowned cold storage services. In a strategic move highlighting investor focus, the management fee for this ETF was slashed to a rock-bottom 0.39 percent in January 2024, aiming to enhance investor value proposition.
4. CI Galaxy Ethereum ETF (TSX:ETHX.B)
Assets under management: C$455.29 million
The CI Galaxy Ethereum ETF stands out as a testament to collaboration and innovation, mirroring the strategic partnership between CI and Galaxy. Delving into the intricacies of Ether holdings, this ETF offers investors a gateway to Ethereum’s world, positioning itself as a compelling investment avenue with its distinct management fee of 0.4 percent.
5. Purpose Ether ETF (TSX:ETHH)
Assets under management: C$369.30 million
Launched alongside its Bitcoin counterpart in April 2021, the Purpose Ether ETF allows investors to tap into the daily price movements of physically settled Ether tokens, underscoring its commitment to providing exposure to this burgeoning asset class. With a robust management fee of 1 percent, this ETF symbolizes a steadfast commitment to investor interests.
Insight into Canada’s Cryptocurrency ETF Investing Landscape
Total Value of Assets: US$299.41 million
The 3iQ CoinShares Bitcoin ETF, established in March 2021, mirrors Bitcoin’s price movement in US dollar terms and securely stores its Bitcoin holdings in cold storage. This ETF comprises a 1 percent management fee and as of July 31, 2024, the information provided on the fund’s website was precise.
Evolve Bitcoin ETF (TSX:EBIT)
Total Value of Assets: C$223.38 million
Evolve ETFs, in partnership with industry experts, launched the Evolve Bitcoin ETF following the success of the Purpose Bitcoin ETF. This ETF, with a 0.75 percent management fee, tracks Bitcoin’s price based on the CME CF Bitcoin Reference Rate.
Purpose Bitcoin Yield ETF (TSX:BTCY)
Total Value of Assets: C$105.5 million
The Purpose Bitcoin Yield ETF aims to provide yield to investors through a covered call strategy involving Bitcoin call options. This strategy allows the fund to generate income from option premiums while granting investors exposure to Bitcoin price fluctuations, with distributions paid out monthly.
Purpose Ether Yield ETF (TSX:ETHY)
Total Value of Assets: C$63.4 million
The Purpose Ether Yield ETF, similar to the Purpose Bitcoin Yield ETF, enables investors to invest in Ether while earning yield. Purpose Investments lends a part of its Ether assets to institutional borrowers, earning interest on these loans, with investors receiving a share of the interest in monthly distributions.
Evolve Ether ETF (TSX:ETHH)
Total Value of Assets: C$63.04 million
The Evolve Ether ETF offers investors a direct avenue to investing in Ether, pricing its holdings based on the CME CF Ether-Dollar Reference Rate. Similar to the Evolve Bitcoin ETF, this fund has a management fee of 0.75 percent.
Total Value of Assets: C$62.3 million
Following the triumph of its Bitcoin ETF, 3iQ Digital Asset Management introduced the CoinShares Ether ETF in April 2021. With a goal akin to its Bitcoin counterpart, the fund provides exposure to Ether and its daily US dollar price changes, coupled with a 1 percent management fee.
Evolve Cryptocurrencies ETF (TSX:ETC)
Total Value of Assets: C$39.09 million
The Evolve Cryptocurrencies ETF, launched in September 2021, is the first multi-cryptocurrency ETF, offering combined exposure to Bitcoin and Ether. By diversifying crypto portfolios, this ETF rebalances its holdings monthly based on market capitalization. While the ETF has no management fee, the underlying funds holding Bitcoin and Ether incur a 0.75 percent management fee.
Fidelity Advantage Ether ETF (TSX:FETH)
Total Value of Assets: C$21.4 million
The newest Ether ETF in Canada, Fidelity’s Advantage Ether ETF, introduced in September 2022, securely stores its holdings in the company’s cold storage facility. This ETF imposes a management fee of 0.4 percent.