Canada’s two ground-breaking Bitcoin Exchange Traded Funds (ETFs) appear to be cooling off following their successful launches less than a month ago.
The Purpose Bitcoin ETF, which launched on February 18 as the first North American Bitcoin ETF, has $470 million in assets under management, equivalent to 10,000 Bitcoin. The Purpose Bitcoin ETF broke records when it launched, trading $165 million-worth of shares in its first day on the Toronto Stock Exchange.
The Purpose Bitcoin ETF shares (TSX: BTCC), which represent the price of Bitcoin, have fluctuated sharply in recent days as the price of Bitcoin has dropped and risen in several volatile trading sessions. On Monday, Bitcoin’s price was up nearly 10% to just over $48,500, although the cryptocurrency was trading above $58,000 less than two weeks ago.
The second Canadian Bitcoin ETF, Evolve (TSX: EBIT), which launched two days after the Purpose Bitcoin ETF, raised $421 million in just two days on the Toronto Stock Exchange. The price of the EBIT ETF has also been volatile in recent trading sessions with the volume of shares trading hands slowing.
Analysts have speculated that the volatility in Bitcoin’s price may have scared some investors away from the two Canadian ETFs. The Purpose and Evolve Bitcoin ETFs allow investors to buy shares that represent the digital asset without having to deal with the cryptocurrency themselves.
A Bitcoin ETF in the United States is anticipated, although the U.S. Securities and Exchange Commission (SEC) has, to date, rejected applications from companies that want to set one up. The SEC claims that a “real” Bitcoin market doesn’t exist, and that the currency’s price is prone to market manipulation.
The rise of cryptocurrency ETFs in Canada shows no signs of abating, however, with the announcement by C.I. Financial, Canada’s largest investment manager, that it plans to launch an ETF for cryptocurrency Ethereum in the coming weeks.
