Evolve Funds has become the second Canadian ETF issuer to secure regulatory approval for a directly backed bitcoin ETF. Canadian securities regulators have now cleared two bitcoin ETFs for launch. The Bitcoin ETF has been cleared by the Ontario Securities Commission and will list on Toronto Stock Exchange, subject to the exchange’s approval.
It is authorized as an “alternative mutual fund” under local regulations and will be offered with US dollar (EBIT.U CN) and unhedged Canadian dollar (EBIT CN) share classes.
The fund will provide exposure to bitcoin, the world’s largest cryptocurrency by market capitalization, by holding actual bitcoin which will be kept in so-called ‘cold storage’ – an institutional-grade custody solution for digital assets.
It will not seek exposure through futures contracts or other derivatives.
Raj Lala, President and CEO, Evolve ETFs, commented: “The Bitcoin ETF is exciting news for investors. Investors will be able to trade bitcoin on a regulated stock exchange. It will be as simple as buying shares through their bank or brokerage. Unlike the technical challenges of investing in bitcoin, units of EBIT will be safely transacted via a familiar brokerage investing platform. EBIT will provide daily liquidity, transparency, and security for directly purchasing bitcoin through a regulated ETF structure.”
Elliot Johnson, Chief Investment Officer and Chief Operating Officer, Evolve ETFs, added: “EBIT will directly own bitcoin on the Bitcoin blockchain in a cold wallet. Investors will have confidence in the secure investment process for the Bitcoin ETF. We are very pleased to be working with best-in-class cryptocurrency experts including Gemini Trust Company, CF Benchmarks, Cidel Trust Company, and CIBC Mellon Global Services.”
The fund will come with a management fee of 1.00% and its NAV will be calculated using the CME CF Bitcoin Reference Rate.
The news comes hot on the heels of fellow Canadian ETF issuer Purpose Investment‘s announcement that it had gained approval to launch a very similar product, the physically backed Purpose Bitcoin ETF, also penciled in to list on Toronto Stock Exchange.