Some investors in North America will finally be able to access a Bitcoin exchange traded fund. Just not in the United States.
Late Thursday, Canadian regulators approved the Purpose Bitcoin ETF, which will trade on the Toronto Stock Exchange under the ticker ‘BTCC’.
“This ETF is an alternative mutual fund. It is permitted to invest in asset classes or use investment strategies that are not permitted for other types of mutual funds,” according to the issuer. “The specific strategies that differentiate this fund from conventional mutual funds may include the: ability to borrow cash to use for investment purposes and increased ability to invest in physical commodities. While these specific strategies will be used in accordance with the fund’s investment objectives and strategies, during certain market conditions they may accelerate the pace at which your investment decreases in value. The ETF invests in bitcoin. Given the speculative nature of bitcoin and the volatility of the bitcoin markets, there is considerable risk that the ETF will not be able to meet its investment objectives. An investment in the ETF is not intended as a complete investment program and is appropriate only for investors who have the capacity to absorb a loss of some or all of their investment.”
Meanwhile, in the United States…
While the ETF market has been anxiously awaiting a Bitcoin ETF, the SEC has turned down all related proposals. Investors and the digital currency universe are hoping a change in leadership at the SEC could bolster Bitcoin ETFs’ chances of success.
Positive regulatory developments may also serve to hasten the ETF approval process, or at least make an approval more likely.
One of the issues for regulators in approving a Bitcoin ETF is that there is unexplained chaos in the cryptocurrency, including illegal activity and the lack of regulation, which can generate wild swings for investors and speculators. This activity has decreased over time, however.
Businesses and currencies exist for roughly the same purpose: to facilitate the exchange of value. Fiat currencies like the U.S. dollar are positively primitive when compared to the promise of blockchain and the emerging token economy, which some technologists have taken to calling an asset operating system. Still, in the U.S., a Bitcoin ETF remains a regulatory matter with little vision on resolution.
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