Canada is witnessing the launch of multiple Exchange-Traded Funds (ETFs), as Fidelity Investments launches a spot Bitcoin ETF, and Purpose Investments launches two BTC and ETH Yield ETFs in the country.
Fidelity Investments’ ETF
Canada can hardly be called a stranger to Bitcoin ETF products. The first such product to hit the Canadian market was launched early this year by Purpose Investments and raked in over $400 million in assets within a couple of days of its launch. Following its success, companies like Galaxy Digital and CI GAM also launched spot BTC ETFs in the country. Now it is the turn of the world’s leading asset manager Fidelity Investments, which currently manages around $4.2 trillion in assets. The company recently received approval from Canada’s regulatory body and decided to launch its spot Bitcoin ETF in Canada instead of waiting around for the SEC’s permission to start one in the US.
The Fidelity Advantage Bitcoin ETF (FBTC) will obtain physical BTCs directly, instead of getting exposed through a derivative instrument. Heavy client demand and the lack of clarity from US authorities have led to the establishment of Fidelity’s ETF based out of Canada. The country’s regulatory authorities have also approved Fidelity’s request to launch its first BTC institutional solution.
Purpose Investments Launches 3 ETFs
Simultaneously, the firm behind the first ETF in North America, Purpose Investments, has gotten back in the game. The asset management company launched three new ETFs yesterday in Canada, two of which have already started trading on the Toronto Stock Exchange as non-currency hedged units called Purpose Bitcoin Yield ETF (BTCY.B) and Purpose Ether Yield ETF (ETHY.B). However, the new BTC and ETH ETFs stand out from the ones launched back in February, as these pay investors a monthly yield by following a derivatives-based covered call strategy. Although the payout amount is subject to volatility and can not be guaranteed, the firm is reportedly expecting an annual yield in the range of 8-10% for both ETFs, with a management fee of 1.10%.
Vlad Tasevski, COO and Head of Product at Purpose Investments, spoke on the matter,
“They should also consider if they want to earn yield while they hold them. Covered call options allow investors to generate additional short-term income on an asset they believe has long-term potential. Given the connection between the volatility of the underlying asset and premiums, covered call strategies on cryptocurrencies offer unique exposure to a unique asset class, providing investors a high yield without sacrificing significant price participation.”
The Third fund, called Purpose Crypto Opportunities ETF began trading Canadian-dollar-denominated ETF non-currency hedged units, and U.S.-dollar-denominated ETF non-currency hedged units under the tickers: CRYP, CRYP.B, and CRYP.U.