Canada Launches First Multi-Cryptocurrency ETF
Evolve Funds Group Inc. is pleased to announce that it has filed the final prospectus with Canadian securities regulators in plans to launch Canada’s first multi-cryptocurrency ETF. The Evolve Cryptocurrencies ETF is expected to begin trading on Wednesday, September 29, 2021 on the Toronto Stock Exchange (“TSX“), subject to TSX approval. ETC is designed to provide investors with one convenient way to obtain exposure to bitcoin and ether, on a market capitalization basis, through an ETF structure.
Exciting news coming from our friends up North! @EvolveETFs has launched Canada’s first multi-crytpo ETF – listed under ticker $ETC on @tsx_tsxv. Congrats🇨🇦#GeminiFundSolutions is proud to be providing the infrastructure to make this work behind the scenes!
— Gemini (@Gemini) September 29, 2021
“Bitcoin has established itself as a store of value and is often referred to as digital gold,” says Raj Lala, President and CEO, Evolve ETFs. “Ether is often referred to as digital oil and has become an essential building block for digital finance including NFTs and other DeFi applications. Together, bitcoin and ether make up about 65% of the total crypto market capitalization. Now investors can access both in one ETF solution.”
ETC seeks to provide investors with exposure to the daily price movements of certain digital assets selected by the Manager from time to time, on a market capitalization basis, while experiencing minimal tracking error by investing in other publicly offered investment funds managed by Evolve. ETC intends to initially invest in Bitcoin ETF (“EBIT“) and Ether ETF (“ETHR“) based on their respective market capitalization weightings, based on the methodology employed by CF Benchmarks. The portfolio will be rebalanced monthly. ETC will not use leverage and does not intend to pay regular cash distributions.
The following chart sets out the TSX ticker symbols for ETC:
|CAD Unhedged Units||USD Unhedged Units|
With combined assets over $185 million, EBIT and ETHR provide investors with exposure to the daily price movements of the U.S. dollar price of Bitcoin and Ether, respectively, by utilizing the benefits of the creation and redemption processes offered by the exchange traded fund structure. EBIT‘s holdings are priced based on the CME CF Bitcoin Reference Rate, a once-a-day benchmark index price for bitcoin denominated in U.S. dollars, while ETHR‘s holdings are priced based on the CME CF Ether-Dollar Reference Rate, a once-a-day benchmark index price for ether denominated in U.S. dollars. Both indices are administered by benchmark administrator, CF Benchmarks.
“While ether and bitcoin can trend in a similar direction, their returns can vary substantially, which makes the case for investors owning a diversified strategy within the asset class,” says Elliot Johnson, Chief Investment Officer and Chief Operating Officer, Evolve ETFs. “The path of returns between bitcoin and ether often cause dramatically different outcomes for investors depending upon their holding period.” According to Bloomberg in 2020, ether outperformed bitcoin by over 150%; however, in 2019, ether’s performance was negative while bitcoin delivered over 90% return.
No management fees will be payable on ETC, however, the underlying investment funds held by the Fund will pay management fees. Currently, the management fees on EBIT and ETHR are 0.75% of net asset values, plus applicable sales taxes.
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