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1st Bitcoin ETF Is 1 Month Old: Here’s How It’s Doing

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North America’s first bitcoin ETF had an auspicious market debut on the TSX. Purpose Bitcoin ETF (TSX:BTCC.B) collected $421.8 million in assets under management (AUM) on the second day from its official launching date on February 18, 2021.

The market’s reception and investors’ interest were huge, given the 9.65 million volume on the first day. Canadians intending to join the bandwagon can snag the Purpose Bitcoin ETF today for $11.05 per share, 10% higher than the closing price on opening day.

One-month anniversary

Purpose Investments Inc., the fund manager, boasts that BTCC.B’s AUM crossed the $1 billion mark on its one-month anniversary. Som Seif, Purpose’s founder and CEO, said, “When we launched Purpose Bitcoin ETF, we knew we were filling a void in the market.” He adds that achieving the milestone quickly proves that investors seek convenient, safe access to cryptocurrencies. It also shows confidence in the ETF as the premier vehicle for crypto exposure.

Purpose Bitcoin ETF invests directly in physically-settled Bitcoin. Since they’re not derivatives, investors gain easy and efficient access to the emerging asset class of cryptocurrency minus the associated risk like self-custody within a digital wallet. Purpose manages the ETF with Ether Capital Corporation as its special consultant. Ether Capital has significant experience and expertise in digital assets.

Great product

According to Brian Mosoff, Ether Capital’s CEO, Purpose Investments helps bring cryptocurrency into the mainstream. He said, “Cryptocurrency ETFs have the potential to be truly revolutionary and are an important investor conduit into the space as the ecosystem continues to mature.”

Seif believes Purpose Investments built a great product. It will impact clients positively and deliver investing experiences. The partnership with Ether Capital made it all possible, he adds.

Potential crypto market driver

The leading digital asset manager is Grayscale Bitcoin Trust that recently launched five more cryptocurrency trusts. However, new Canadian bitcoin ETFs can possibly replace Grayscale as the primary crypto market driver. CrossTower, a digital asset firm, made the prediction.

The report by CrossTower said the first of their kind in America, particularly the Purpose Bitcoin ETF, could become the major force behind the cryptocurrency market. The inflow since launching is a clear indication. The same report adds that BTCC.B should capture a portion of investor demand and win out due to lower management fees than Grayscale.

Grayscale expressed interest in applying for and launching a bitcoin ETF in the U.S. It only needs to obtain a green light from regulators to make it happen. Current CrossTower and former Wells Fargo analyst Martin Gaspar said, “We expect ETFs to fill the inflow gap as awareness grows and as investors prefer the liquidity of an ETF to trusts.”

Three bitcoin ETFs

The total bitcoin holding of Purpose Bitcoin ETF from mid-February to March 15, 2021, is now 11,711.  A day after its market debut, Evolve Bitcoin ETF, TSX’s second ETF, started trading. On March 9, 2021, CI Galaxy Bitcoin ETF became North America’s third bitcoin ETF.

The launching of three Bitcoin ETFs in Canada is a sign that cryptocurrencies are gaining traction. They’re slowly becoming broadly acceptable assets. It should attract a whole new class of investors to the cryptocurrency space.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Christopher Liew has no position in any of the stocks mentioned.

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