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Best Bitcoin ETFs To Buy In Canada For July 2024
2024/07/10By:
In January 2024, SEC approved 11 U.S.-based spot Bitcoin ETFs, giving traders a way to access Bitcoin without having to custody the crypto coin themselves or trade with an exchange that may be fraudulent. Since the approval, many different kinds of investors have suddenly taken interest in the asset class and started investing in Bitcoin through this new availability.
In Canada, Bitcoin ETFs are not new things as this country has adopted spot Bitcoin ETFs as an investment since 2021. Although this investment option has been available to Canadians for a few years, this exciting news of spot ETH ETFs getting approval from the U.S. might have attracted more interest in Bitcoin ETFs.
The best Bitcoin ETFs offer a easy and cheap way to buy and sell the cryptocurrency through an online broker rather than through the potentially riskier process of using a cryptocurrency exchange. If you are just a newcomer with massive interests in Bitcoin ETFs, next, we will explore more information about Bitcoin ETFs, like what is Bitcoin ETF? Which are best Bitcoin ETFs in Canada for this July? Simply put, we will explore from following aspects:
Pros and Cons of Investing in Bitcoin ETFs
Best Bitcoin ETFs In Canada For July 2024
Fidelity Advantage Bitcoin ETF
Purpose Bitcoin Yield ETF
Impact of Spot Bitcoin ETFs on Bitcoin Price
Risks of Bitcoin ETFs in Canada
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What is a Bitcoin ETF?
Just like its name, a Bitcoin ETF represents a category of investment funds designed to track the price movements of Bitcoin without requiring investors to directly hold the digital asset. Instead, investors can purchase shares of these ETFs through traditional brokerage accounts, providing them with exposure to Bitcoin’s price fluctuations.
Bitcoin ETFs work as a bridge for traditional investors to get exposure to Bitcoin without the complexities of directly holding cryptocurrency. These financial instruments track the price of Bitcoin, enabling investors to buy and sell shares through conventional stock exchanges. The appeal of Bitcoin ETFs lies in their ability to provide a regulated, secure, and accessible investment avenue into the evolving world of cryptocurrencies.
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Types of Bitcoin ETFs
In terms of types of Bitcoin ETFs, there are two major types of Bitcoin ETFs: spot Bitcoin ETFs and futures Bitcoin ETFs.
Spot Bitcoin ETFs: A spot Bitcoin ETF is a type of exchange-traded fund that aims to provide investors with direct exposure to the current market price of Bitcoin. A spot Bitcoin ETF typically holds actual Bitcoin as its underlying asset attempts to track the real-time price of Bitcoin as closely as possible, offering a more straightforward investment option for those seeking direct exposure to the cryptocurrency’s price movements.
Futures Bitcoin ETFs: futures Bitcoin ETFs do not provide direct exposure to the actual Bitcoin asset. Instead, these ETFs invest in futures contracts, which are agreements to buy or sell Bitcoin at a future date at a predetermined price. Futures ETFs often involve higher fees and greater volatility compared to spot ETFs.
Pros and Cons of Investing in Bitcoin ETFs
Before investing Bitcoin ETFs, you should be full aware of the advantages and disadvantages of this investment class, which is set as below:
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Best Bitcoin ETFs In Canada For July 2024
After introduce the basic knowledge about Bitcoin ETFs. Next, we will introduce four best Bitcoin ETFs in Canada for July 2024 based on our analysis.
CI Galaxy Bitcoin ETF
Launched in March 2021, CI Galaxy Bitcoin ETF is an exchange-traded fund (ETF) designed to track the price performance of Bitcoin. CI Galaxy Bitcoin ETF is managed by CI Galaxy Digital Asset Management, a company focused on digital asset management and investment. The ETF provides a way to invest in Bitcoin without being directly involved in the trading and storage of Bitcoin, while providing some liquidity and price transparency.
CI Galaxy Bitcoin ETF is one of the best Bitcoin ETFs in Canada due to the lowest fees of 0.4% it charges. Aiming to give investors exposure to Bitcoin via an institutional-quality fund platform, the CI Galaxy Bitcoin ETF is one of the larger Bitcoin ETFs in Canada in terms of assets under management and is one of the best performing.
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Purpose Bitcoin ETF
Launched in February 2021, the Purpose Bitcoin ETF is not only the first spot Bitcoin ETF in the world, but also owns the most assets under management at $2 billion. The Purpose Bitcoin ETF is a passively managed cryptocurrencies fund by Purpose Investments, who manage 69 other funds in Canada, with a total of $7,375.35 million in assets under management. The performance of its funds year-to-date is among the best on this list at 145.93% (FX hedged) and 148.49% (non-FX hedged). Its Management Expense Ratio (MER) is 1.49% and management fee is 1%.
Purpose Bitcoin ETF aims to provide a way for investors to invest in Bitcoin as if they were buying shares, without having to participate directly in the trading and storage of Bitcoin.
3iQ Coinshares Bitcoin ETF
Launched in March 2021, the 3iQ CoinShares Bitcoin ETF tracks the price movement of Bitcoin in US dollar terms, and holds its Bitcoin assets in cold storage with no digital wallet required. This ETF comes with a management fee of 1%, which is relative higher. The 3iQ CoinShares Bitcoin ETF seeks to provide unit holders with (a) exposure to the digital currency Bitcoin and the daily price movements of the U.S. dollar price of Bitcoin, and (b) the opportunity for long-term capital appreciation by investing in long-term holdings of Bitcoin.
3iQ CoinShares Bitcoin ETF was launched to meet the growing investment demand for cryptocurrencies such as Bitcoin, while also providing investors with a more convenient and secure way to invest. By buying ETF shares, investors can enjoy the potential gains of the Bitcoin market while avoiding the risks that come with holding Bitcoin directly, such as storage security, price volatility, etc. Currently, 3iQ Coinshares Bitcoin ETF’s consensus rating is “Strong Sell” based on 0 analysts according to Zacks.
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Fidelity Advantage Bitcoin ETF
Launched in November 2021, the Fidelity Advantage Bitcoin ETF is the newest Bitcoin fund compared with above-mentioned. The ETF is designed to provide investors with a convenient way to invest in Bitcoin without directly participating in the trading and storage of the cryptocurrency. By buying ETF shares, investors can indirectly gain exposure to Bitcoin and enjoy the potential appreciation of the Bitcoin market.
This ETF now charged the lowest management fee for a Bitcoin ETF in Canada. This comes after Fidelity Canada ULC announced they’d be cutting the fee from 0.44% to 0.39%, in an effort to compete with the lower fees of U.S.-listed spot Bitcoin ETFs. Besides, it has fewer assets under management than other Bitcoin ETFs listed in Canada.
Purpose Bitcoin Yield ETF
Launched in 2021, the Evolve Bitcoin ETF (EBIT) is an exchange-traded fund that provides investors with exposure to Bitcoin. By getting exposure to Bitcoin, Canadian investors are allowed to hold Bitcoin in an indirect way. Purpose Bitcoin Yield ETF trades under three ticker symbols:
- BTCY.TO – priced in Canadian dollars but hedged against US dollar price fluctuations
- BTCY.B – priced in Canadian dollars, unhedged
- BTCY.U.TO – priced in US dollars
Notably, Purpose Bitcoin Yield ETF generates a yield, paying approximately 8% (this can vary significantly throughout the year). Like a dividend yield, this will vary based on the price of Bitcoin and the performance of the “covered calls”. If Canadian investors want income by investing in Bitcoin, Bitcoin Yield ETF can be a viable choice.
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Conclusion
At present, countries like Germany, Canada, Switzerland, and Hong Kong have continued to acquire spot Bitcoin ETFs, with Purpose Bitcoin ETF leading the pack, storing a total of 27,110 BTC, 7,000 BTC higher than Germany’s BTCE with 20,837 BTC. In Canada, a country with wide acceptance of Bitcoin ETFs, investing in Bitcoin ETFs is not too difficult.
After analysis, the best Bitcoin ETFs we list for Canadians to trade in July 2024 include CI Galaxy Bitcoin ETF, Purpose Bitcoin ETF, 3iQ Coinshares Bitcoin ETF and Fidelity Advantage Bitcoin ETF. Although the existence of Bitcoin ETFs offers a cheaper and easier way to trade Bitcoin, all investments carry risks, especially for Bitcoin, which is not backed by anything except the sentiment of traders. Therefore, all traders are advised to make deep analysis about all information, such as management fee, share price, market condition,etc., before making any investment decision regarding Bitcoin ETFs.
Impact of Spot Bitcoin ETFs on Bitcoin Price
Generally speaking, a spot Bitcoin ETF does not directly affect the price of Bitcoin, but it can indirectly exerts a profound influence on Bitcoin price. Spot Bitcoin ETFs attract institutional investors who previously unwilling to join in the cryptocurrency market due to its volatility nature and security concerns. Spot Bitcoin ETFs provide investors with regulated and accessible exposure to Bitcoin, thus attracting more influx of institutional capital. The inflow of capital from institutional and traditional investors makes great contributions to market liquidity and stability, reducing volatility in the long run.
As Bitcoin ETFs continue to evolve and gain traction, their role in shaping the future of Bitcoin’s price dynamics and market landscape cannot be understated.
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Risks of Bitcoin ETFs in Canada
The price of the Bitcoin ETF is directly affected by price fluctuations of Bitcoin. Since Bitcoin is highly volatile in nature, the prices of Bitcoin ETFs can also fluctuate wildly, which can cause investors to face large capital losses in the short term. In addition, supply and demand of Bitcoin will also have an impact on the price of Bitcoin ETFs. If demand for Bitcoin increases, the price of Bitcoin ETFs could rise; Conversely, if demand falls, prices of Bitcoin ETFs may fall.
While Bitcoin ETFs are listed on trading platforms such as the Toronto Stock Exchange, they may not be as active as some traditional financial products. This may make it difficult in some cases for investors to buy and sell Bitcoin ETFs quickly at thier desired price, thus affecting the liquidity of funds and investment efficiency. Regulatory policy for Bitcoin and other cryptocurrencies in Canada and globally could change. If the regulatory policy in Canada is tightened, it may have an impact on the legitimacy and operation of Bitcoin ETFs, which in turn increases the investment risk.
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