Evolve Bitcoin ETF has become the second company to get approval in Canada for a Bitcoin Exchange-traded fund (ETF).
The conditional approval was granted on Tuesday, which means Evolve may trade BTC ETF on the Toronto Stock Exchange.
The simplicity of ETF trading is an advantage
President and chief executive officer of Evolve ETFs Raj Lala commented on the approval, by saying it’s exciting news for the company. “Investors will be able to trade Bitcoin on a regulated stock exchange,” Lala added.
The simplicity of the ETF trading is what makes it very attractive as it will not be more difficult than simply buying shares through their brokerage or bank.
While Bitcoin investment passes through technical challenges, investments in EBIT will be transacted safely through the brokerage investing platform. It will offer security, transparency, and day liquidity when buying Bitcoin through an ETF structure, LaLa added.
ETF backed by physically settled BTC holdings
EBIT hopes to expose investors to daily price movements. The ETF will be backed by physically settled Bitcoin holdings, but will not seek exposures through futures contracts or derivatives.
As reported, this will be the second ETF approved by the Canadian watchdog following the approval of Purpose Investment’s Bitcoin ETF last week.
Both ETFs will charge 1% of transactions, which is slightly above the lowest Bitcoin ETF fee offered by Wisdom Tree at 0.95%.
ETFs provide the avenue for investors to enter the Bitcoin market without necessarily holding the asset and preventing deals with premium fees from funds such as Grayscale Bitcoin Trust.
Evolved has partnered with different companies to provide ETF services when it launches on the exchange. It has tapped CIBC Mellon Global Securities as its fund administrator, Gemini Trust Company as its sub-custodian, Cidel Trust Company as its main custodian. Additionally, EY and CB Benchmarks will become the firm’s auditor and index provider respectively.
According to the announcement, the fund will be settled physically, which means the investors will earn their Bitcoins only after exiting from the investments. It goes ahead to reduce the risk of slippages, which has been the major issue with cash-settled instruments.