Recently, two different firms applied for Bitcoin ETF and have been approved by the Canadian authorities. Right now, investors are getting more attracted to BTC ETF, which is increasingly growing in popularity. CI Financial is the recent company set to join its counterparts who have earlier launched BTC ETF. Galaxy Digital is going to be in charge of the project.
Canada is pioneering the Bitcoin ETF market in the North American region. Yesterday, the firm submitted a prospectus for the project. ETFs are investment instruments used to buy shares in another asset. Assuming you are holding an ETF share, it means your broker will hold some Bitcoin and keep it on your behalf while they charge you a transaction fee.
This will be the third approved Bitcoin ETF
CI, based in Toronto, has been in existence since 1965. It is currently managing $231 billion in the asset, as published in the company’s directory. If the Canadian authorities grant the ETF approval, CI will also start its Bitcoin ETF following Evolve Funds and Purpose’s recent successful launch. Purpose pioneered the Bitcoin ETF at the Stock Exchange this week, trading over $164 million in 24 hours.
Apart from the companies mentioned above, others, such as 3iQ, have applied to launch Bitcoin ETF. In just an hour after being lunched, Popular ETF Bitcoin had traded $80 million. There are many reasons investors are interested in ETFs. First of all, ETFs make trading Bitcoin on the stock exchange an easy task.
Hence, Canadian investors won’t have to buy, keep, and trade Bitcoin to enjoy the digital currency’s bullish momentum. Those who choose ETF are free of the complexity associated with the crypto market and the volatile nature. Another advantage of ETFs is that they are cheaper. They also give more accurate data of the asset. ETFs are regulated. This development will enable investors to have a rest of mind against the crypto market’s volatility.
Any disadvantage of Bitcoin ETFs?
Although, Bitcoin ETFs are comparatively less expensive than other BTC investment instruments like some Bitcoin trusts advertised everywhere. For example, Grayscale Bitcoin Trust has $34 billion worth of Bitcoin. The trusts buy BTC with private funds to push the price of the asset up. After that, they sell their trusts’ shares on the exchange.
This is partly why they are relatively expensive. While some of the trusts charge 2% fees, others a just a bit lower. Bitcoin ETFs also have some of their disadvantages. First, they charge management fees. This is because they are a better alternative to other Bitcoin investments in terms of convenience. Hence, the higher the number of your shares, the higher the management fees.
Besides, ETFs may not accurately track the changes in the Bitcoin movement. For instance, a 20% rise in BTC value may not reflect the same percentage in your portfolio. Furthermore, Bitcoin ETF is limited to Bitcoin alone, unlike Bitcoin, which can trade other cryptocurrencies like Ethereum, Ripples, and more.