Cryptocurrencies such as Bitcoin and Ethereum offer an alternative route for building and storing wealth. While directly holding these digital assets is a popular option, investors are also clamoring for financial products such as crypto exchange-traded funds (ETFs).
Canada first launched Bitcoin and Ethereum ETFs in 2021. These Canadian Bitcoin and Ethereum ETFs allow investors to place returns in tax-sheltered accounts like tax-free savings accounts or registered retirement savings plans.
“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,” Ross Mayfield, investment strategy analyst at Robert W. Baird & Co., told Bloomberg in mid-2021.
Interest has only increased since then. Sean Farrell, head of digital asset strategy at Fundstrat, wrote in mid-2023 that the Bitcoin ETF category at large has the potential to surpass the precious metals ETF market in terms of asset value. ‘Bitcoin ETF eventually could become >$300 billion category,’ he stated in the note.
Ethereum ETFs have also picked up steam and become a major talking point. Ethereum is the most widely used blockchain technology, and Ether, the digital currency of this platform, is the second largest cryptocurrency after Bitcoin.
With that in mind, it’s worth taking a look at the currently available Canadian cryptocurrency ETFs. The list below includes 13 options available on the Canadian market sorted by assets under management, and all data presented is current as of August 23, 2024.
1. Purpose Bitcoin ETF (TSX:BTCC)
Assets under management: C$2.3 billion
Billed as the world’s first physically settled Bitcoin ETF, the Purpose Bitcoin ETF launched in February 2021 and is backed by Bitcoin in cold storage. This means the fund allows investors to add and sell Bitcoin with no digital wallet required.
Hosted by Canadian investment company Purpose Investments, the Purpose Bitcoin ETF is backed by 26,983.5 Bitcoins and has a management expense ratio of 1 percent.
2. CI Galaxy Bitcoin ETF (TSX:BTCX.B)
Assets under management: C$754.17 million
Launched in March 2021, the CI Galaxy Bitcoin ETF was born out of a partnership between cryptocurrency leaders Galaxy Fund Management and CI Global Asset Management. Galaxy Fund Management is part of Galaxy Digital, a diversified financial services firm with a focus on digital assets and the blockchain technology sector.
The ETF’s objective is to give investors exposure to Bitcoin via an institutional-quality fund platform, as its holdings are wholly Bitcoin and are kept in cold storage. At 0.4 percent, this fund boasts one of the lowest management fees of all the crypto funds on the market.
3. Fidelity Advantage Bitcoin ETF (TSX:FBTC)
Assets under management: C$506.30 million
The newest Bitcoin fund on this list, the Fidelity Advantage Bitcoin ETF, launched in November 2021. It offers the security of Fidelity’s in-house cold storage services for its holdings.
While it previously had a management fee of 0.4 percent, in line with the CI and Galaxy funds, the Fidelity Advantage Bitcoin ETF lowered it in January 2024 to an ultra-low management fee of 0.39 percent.
4. CI Galaxy Ethereum ETF (TSX:ETHX.B)
Assets under management: C$455.29 million
The CI Galaxy Ethereum ETF, another collaboration between CI and Galaxy, offers investors exposure to the spot Ethereum price through Ether holdings in cold storage. The fund launched on April 20, 2021, the same day as two of the other Ether ETFs on this list.
At the time, CI Global Asset Management suggested that “owning Ether is similar to owning a basket of early-stage, high-growth technology stocks.”
The CI Galaxy Ethereum ETF has notably low management fees of just 0.4 percent.
5. Purpose Ether ETF (TSX:ETHH)
Assets under management: C$369.30 million
The Purpose Ether ETF is a direct-custody Ether ETF that launched on April 20, 2021. This fund holds 98,611 Ether, which it stores in cold storage.
The Purpose Ether ETF offers investors exposure to the daily price movements of physically settled Ether tokens with a management fee of 1 percent.
6. 3iQ CoinShares Bitcoin ETF (TSX:BTCQ)
Assets under management: US$299.41 million
Launched in March 2021, the 3iQ CoinShares Bitcoin ETF tracks the price movement of Bitcoin in US dollar terms, and holds its Bitcoin assets in cold storage. This ETF has a management fee of 1 percent. Figures for this ETF were accurate as of July 31 2024, according to the fund’s website.
7. Evolve Bitcoin ETF (TSX:EBIT)
Assets under management: C$223.38 million
Evolve ETFs partnered with cryptocurrency experts, including Gemini Trust Company, CF Benchmarks, Cidel Bank & Trust and CIBC Mellon Global Services, to launch the Evolve Bitcoin ETF. The fund, which holds its own Bitcoin, has a management fee of 0.75 percent.
Launched a week after the Purpose Bitcoin ETF, its holdings of Bitcoin are priced based on the CME CF Bitcoin Reference Rate, a once-a-day benchmark index price for Bitcoin denominated in US dollars.
8. Purpose Bitcoin Yield ETF (TSX:BTCY)
Assets under management: C$105.5 million
The Purpose Bitcoin Yield ETF uses a covered call strategy to generate yield for investors, which involves writing call options on Bitcoin. Call options give the buyer an option to purchase an asset at a specific price on or before a specific date.
Its structure allows the fund to earn income from option premiums while providing investors with exposure to Bitcoin’s price movements. Its distributions are paid monthly.
9. Purpose Ether Yield ETF (TSX:ETHY)
Assets under management: C$63.4 million
Like the Purpose Bitcoin Yield ETF, the Purpose Ether Yield ETF offers investors an opportunity to invest in Ether while also generating yield. Purpose Investments lends a portion of its Ether holdings to institutional borrowers and earns interest on those loans.
Investors who purchase shares of this ETF receive a portion of the interest earned in monthly distributions.
10. Evolve Ether ETF (TSX:ETHH)
Assets under management: C$63.04 million
The Evolve Ether ETF offers investors an easier route to investing directly in Ether. The fund’s holdings of Ether are priced based on the CME CF Ether-Dollar Reference Rate, a once-a-day benchmark index price for Ether denominated in US dollars. As with the Evolve Bitcoin ETF, the Evolve Ether ETF has a management fee of 0.75 percent.
11. 3iQ CoinShares Staking Ether ETF (TSX:ETHQ)
Assets under management: C$62.3 million
Following the success of its Bitcoin ETF, 3iQ Digital Asset Management launched its CoinShares Ether ETF in April 2021. This fund has a similar objective, offering exposure to Ether and its daily US dollar price movements. It also has a management fee of 1 percent.
Figures for this fund were accurate as of July 31, 2024, according to the fund’s website.
12. Evolve Cryptocurrencies ETF (TSX:ETC)
Assets under management: C$39.09 million
The Evolve Cryptocurrencies ETF launched in September 2021 as the first multi-cryptocurrency ETF, providing combined exposure to both Bitcoin and Ether.
This product from Evolve ETFs allows investors to diversify their crypto portfolios and provides indirect exposure to the two coins, weighing them by market capitalization and rebalancing its holdings on a monthly basis. Bitcoin makes up the majority of its portfolio.
While this ETF has no management fee, the underlying funds that hold both Bitcoin and Ether have management fees of 0.75 percent plus applicable taxes.
13. Fidelity Advantage Ether ETF (TSX:FETH)
Assets under management: C$21.4 million
Following the successful launch of its Bitcoin fund, Fidelity brought its Advantage Ether ETF to market in September 2022, making this the newest Ether ETF in Canada. Its holdings are stored in Fidelity’s in-house cold storage.
The Fidelity Advantage Ether ETF has a management fee of 0.4 percent.
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
