In brief
- Canadian exchange-traded funds provider Evolve Funds Group has launched a multi-crypto ETF.
- The new product is pegged to both Bitcoin and Ethereum.
Canadian exchange-traded funds (ETF) provider Evolve Funds Group has launched the country’s first multi-crypto ETF on the Toronto Stock Exchange, the Evolve Cryptocurrencies ETF.
Trading under the tickers ETC (CAD Unhedged Units) and ETC.U (USD Unhedged Units), the Evolve Cryptocurrencies ETF will initially invest in Bitcoin ETF ("EBIT") and Ether ETF ("ETHR").
An ETF is a type of security that is pegged to various assets (or baskets of them), shares of which can be listed and traded on exchanges. In the case of a crypto ETF, the underlying assets are cryptocurrencies. In this way, crypto ETFs allow institutional investors to gain exposure to digital assets without actually buying or holding them.
Despite initially thinking that the Evolve Cryptocurrencies ETF was the first multi-crypto ETF in the world, Raj Lala, president and CEO of Evolve, told Wealth Professional that he received a message from a Brazilian issuer correcting the misconception. "There may be a couple in other parts of the world, but I know for a fact it’s Canada's first, and I think it would also be North America’s first," he said.
Canada races ahead of the U.S.
While four Bitcoin ETFs—the Purpose Bitcoin ETF, Evolve Bitcoin ETF, CI Galaxy Bitcoin ETF, and 3iQ CoinShares Bitcoin ETF—have already been launched in Canada since February, Evolve’s 200 million CAD ($157 million) multi-crypto ETF stands out among them since it comprises both Bitcoin and Ethereum, Lala said.
“Even though these two cryptocurrencies are somewhat correlated to each other, they’ve had different return profiles," he noted. "So, by putting them into one ETF and accessing both at the same moment, you’re taking out some of the guesswork.”
He added that such diversified funds allow investors “to dampen some of that volatility and hopefully capitalize on the cryptocurrency that’s significantly outperforming the other.”
Although Canada now has several crypto ETFs up and running, the U.S. has lagged behind. Despite receiving numerous Bitcoin ETF applications over the past few years, the Securities and Exchange Commission has yet to approve a single one of them.
Those who've put their hat in the ring include VanEck, Valkyrie Investments, the New York Digital Investment Group and Stone Ridge and WisdomTree. SEC chair Gary Gensler has hinted that he would favor a Bitcoin futures ETF rather than one backed by physical Bitcoin.