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North America's second bitcoin ETF launches in Canada today

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UKRAINE - 2021/02/17: In this photo illustration the Bitcoin cryptocurrency price is seen on a smartphone screen. (Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images)
Bitcoin hit a new record high today Getty Images)

On the same day bitcoin’s market cap crossed US$1 trillion for the first time, investors got a second ETF option with the launch of the Evolve Bitcoin ETF on the TSX.

It’s the second bitcoin ETF to launch in Canada this week, following the Purpose Bitcoin ETF (BTTC.B) (BTCC.U) yesterday. It’s also the second of its kind in North America, with the U.S. still not approving one.

Canadian dollar-denominated unhedged units trade under ticker symbol EBIT and U.S. dollar-denominated unhedged units under EBIT.U with an annual management fee of 1 per cent.

EBIT ended the day up 6.7% with a volume of 355,000 shares. EBIT.U was up 7.6% with 103,000 shares trading hands.

“The recent institutional adoption has helped further legitimize the progress of bitcoin,” said Raj Lala, Evolve President and CEO in a release.

“Being able to offer an ETF which holds physical bitcoin is a real game changer in Canada. Now investors may participate in bitcoin via their brokerage accounts within their RRSP and TFSA. Bitcoin has proven to be a store of value that is uncorrelated to other major asset classes – and has now emerged as an asset class itself.”

Like the BTCC, EBIT’s ETF structure means it aims to track the price of bitcoin better than closed-end funds and exchange traded notes, because of the premium that comes with those products.

Evolve says EBIT doesn’t rely on derivatives or futures contracts. The daily net asset value (NAV) will be based on the CME CF Bitcoin Reference Rate.

The bitcoin the ETF buys will be held in a cold wallet. Gemini Trust Company will act as the sub-custodian in respect of EBIT’s holdings of bitcoin.

Bitcoin got a stamp of approval from Tesla earlier this month when the company announced it was buying US$1.5 billion of the notoriously volatile cryptocurrency. But earlier this week the Bank of Canada’s deputy governor Timothy Lane warned cryptocurrencies are a “speculative mania” and a “flawed method of payment”.

The price of bitcoin is up 81 per cent this year and topped US$53,000 US today.

Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.

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