In brief
Canada’s Purpose Bitcoin ETF today launched and made its shares available on the Toronto Stock Exchange.
It is North America’s first ever Bitcoin ETF.
And so far, so good: it traded $80 million-worth of shares in its first hour.
North America’s first ever Bitcoin exchange-traded fund (ETF) launched today. It traded $165 million-worth of shares in its first day, including $80 million in its first hour, according to Bloomberg data.
The Purpose Bitcoin ETF was approved in Canada earlier this month and runs on the Toronto Stock Exchange. The physical Bitcoin that the ETF trades is stored by crypto exchange, Gemini.
According to Bloomberg ETF analyst, Eric Balchunas, it was an “epic full first day” for Purpose.
Exchange traded funds allow investors to buy and sell shares continually throughout the day.
The Bitcoin ETF allows investors to buy shares that represent the digital asset without having to actually own the cryptocurrency themselves.
The world’s first Bitcoin ETF got approval in Bermuda last year.
Purpose’s Bitcoin ETF allows “easy and efficient access” to Bitcoin “without the associated risk of self-custody within a digital wallet,” according to Purpose, the asset management company running the ETF.
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“We believe Bitcoin, as the first and largest asset in the emerging cryptocurrency ecosystem, is poised to continue its growth trajectory and adoption as an alternative asset, further cementing the investment opportunity it presents,” Purpose CEO Som Seif said in a statement.
Purpose’s Bitcoin ETF is the first such ETF in North America. In the US, regulators have yet to approve one. The US Securities and Exchange Commission (SEC) has rejected applications from companies that want to launch an ETF, including Bitwise and Wilshire Phoenix. The SEC claims that a "real" Bitcoin market doesn’t exist in the US, and that the currency’s price is prone to manipulation by those with significant holdings.
But Canada has had some luck, it seems: the Purpose Bitcoin ETF got the green light on February 11. And a second ETF, by Evolve Funds Group, also got approval this month—but it isn’t up and running yet.
After today’s success, perhaps a Bitcoin ETF in the US may be one step closer to a reality. Though that might not be a good thing.
Quantum Economics analyst Charles Bovaird told Decrypt: “Since a Bitcoin ETF has launched in Canada, this development might ‘steal the thunder’ surrounding the launch of any such fund in the US."
Bovaird added: “More specifically, the existence of this Canadian ETF could make the approval of any US ETF less of a milestone, since it would not be the first fund of this kind to be approved by regulators.”
The existence of one or more Canadian ETFs, said the analyst, could reduce the trading volume that a US Bitcoin ETF draws if and when it finally obtains approval from the SEC.