7 Best Bitcoin ETFs in Canada for September 2022

If you are looking to invest in Bitcoin, there are several benefits to doing so through an ETF.

The cryptocurrency has faced a lot of selling pressure throughout 2022, dropping roughly 56% in price between January 1st and September 1st.

While it’s difficult to determine where the price of Bitcoin will go from here, it’s definitely a more attractive entry point than at the beginning of the year.

We’ll cover some of the best Bitcoin ETFs in Canada below and discuss some of the reasons to invest in cryptocurrency through an ETF.

The Investment Case for Bitcoin

Since Bitcoin does not pay a dividend, investors are simply expecting the price of Bitcoin to be higher in the future when they decide to sell. Since Bitcoin is more similar to commodities than traditional stocks, it becomes important to consider supply and demand.

Supply of Bitcoin

Bitcoin’s supply is finite, with the cryptocurrency being limited to 21 million units by its original creator. As the world’s supply continues to progress towards the 21 million unit limit, additional Bitcoins will become increasingly harder to mine.

A limited supply of a good usually contributes positively to that good’s price, as long as the good is useful. 

Demand for Bitcoin

Demand is a critical point to consider when thinking about Bitcoin long-term. A limited or scarce supply of anything is only helpful in boosting its price if it is useful and people value it.

Demand for Bitcoin is currently fueled by its usefulness:

  • Ease of using the cryptocurrency internationally
  • User anonymity 
  • Independence from central banks 
  • Irreversible transactions

Currently, both El Salvador, as well as the Central African Republic use Bitcoin as an official national currency.

As long as Bitcoin adoption continues to increase in the future, demand for the cryptocurrency will increase, which should help to boost its price.

Bitcoin has faced extreme volatility over the past several years. This may limit its attractiveness as a replacement for typical fiat currencies (printed money), which are designed to be a more stable store of wealth.

Pros and Cons of Investing in Bitcoin through an ETF

If you’ve made the decision to invest in Bitcoin (and understand the risks involved), choosing to invest through an ETF instead of a regular wallet comes with key advantages and disadvantages.

Investing in Bitcoin is extremely risky and likely not a substitute for a well-built investment portfolio. If you are determined to invest in Bitcoin, the advantages of doing so through an ETF within a tax-deferred or tax-exempt accounts like a TFSA or RRSP likely outweigh the disadvantages.

Pros
  • The ability to use tax-deferred and tax-exempt accounts like a TFSA or RRSP.
  • Avoiding potential issues with crypto wallets (forgetting passwords etc.)
  • The ability to trade the Bitcoin ETFs like any regular stock and include it as part of your portfolio
Cons
  • Having to pay fees at the fund level
  • Having to buy and sell the ETF through a bid-ask spread
  • Lack of direct Bitcoin ownership and the benefits that come with it, such as privacy

Best Bitcoin ETFs in Canada

1. CI Galaxy Bitcoin ETF

CI Global Asset Management Logo
  • Ticker: BTCX-B.TO
  • US Dollar Ticker: BTCX.U.TO
  • Inception Date: March 5, 2021
  • Assets under Management: $224.3 Million
  • Management Fee: 0.40%
  • Management Expense Ratio: 0.85%
  • Risk Rating: High
  • Distributions: Annually
  • Distribution Yield: 0%
  • Cold Storage: Yes
  • Stock Price: $3.89
  • YTD Return: -55.57%

CI Global Asset Management is a very large investment manager in Canada in terms of both institutional and retail assets. The CI Galaxy Bitcoin ETF, also available as a mutual fund, is one of the key funds on its alternatives shelf.

BTCX focuses on tracking the price movement of Bitcoin and does not offer investors any additional features. The ETF’s performance has been almost identical to that of the price of Bitcoin, less any fees.

The fund is fairly large in terms of assets and is the lowest-cost Bitcoin ETF option for Canadians. The fund has a US dollar version as well, allowing it to be purchased on the US side of your accounts.

The Bitcoin held by CI is stored in cold storage or an offline cryptocurrency wallet. This is one of the safest ways to hold Bitcoin, as the cryptocurrency is protected from any hackers.

As the lowest-cost Bitcoin ETF in Canada, BTCX is a top choice for Bitcoin investors looking to access it through a fund.

2. Fidelity Advantage Bitcoin ETF

Fidelity Logo
  • Ticker: FBTC.TO
  • US Dollar Ticker: FBTC.U.TO
  • Inception Date: November 30, 2021
  • Assets under Management: $26.1 Million
  • Management Fee: 0.40%
  • Management Expense Ratio: 0.96%
  • Risk Rating: High
  • Distributions: Annually
  • Distribution Yield: 0%
  • Cold Storage: Yes
  • Stock Price: $8.87
  • YTD Return: -55.47%

As another massive investment manager globally, Fidelity has also recently launched a Bitcoin ETF in Canada. The ETF is designed to track the price of Bitcoin, minus any fees.

Fidelity’s Bitcoin ETF is very small in terms of assets under management, likely because it was launched much later than its peers here in Canada. This may put the fund at risk of closing down in the future if it’s unable to attract additional assets.

In terms of fees, FBTC is offered at a fairly low MER relative to peers in the Canadian Bitcoin ETF space. It is marginally more expensive than CI’s Bitcoin ETF.

Fidelity also offers a US dollar version of its Bitcoin ETF, FBTC.U, which allows Canadians to add it to their US dollar portfolios.

As one of the most inexpensive options in the Canadian Bitcoin ETF space, Fidelity’s FBTC ETF is a great choice to consider.

3. 3iQ CoinShares Bitcoin ETF

3iQ Logo
  • Ticker: BTCQ.TO
  • US Dollar Ticker: BTCQ.U.TO
  • Inception Date: March 31, 2021
  • Assets under Management: $325.3 Million
  • Management Fee: 1.00%
  • Management Expense Ratio: 1.25%
  • Risk Rating: High
  • Distributions: Annually
  • Distribution Yield: 0%
  • Cold Storage: Yes
  • Stock Price: $4.32
  • YTD Return: -55.68%

A much less well-known asset manager in Canada is 3iQ. As a result of gathering significant assets across their Bitcoin and Ether funds, they are the largest digital asset fund manager in Canada.

Similar to most Bitcoin ETFs on our list, BTCQ is a plain vanilla fund that simply tracks the price movement of Bitcoin.

BTCQ is a very large fund in terms of assets and is substantially more expensive in terms of total fees than other Bitcoin ETF options on our list.

3iQ also offers BTCQ.U for investors looking to add Bitcoin exposure to the US side of their accounts.

3iQ holds the ETF’s underlying Bitcoin in cold storage.

4. Purpose Bitcoin Yield ETF

Purpose Investment Logo
  • Ticker: BTCY-B.TO
  • Hedged Ticker: BTCY.TO
  • US Dollar Ticker: BTCY.U.TO
  • Inception Date: November 30, 2021
  • Assets under Management: $37.3 Million
  • Management Fee: 1.10%
  • Management Expense Ratio: 1.28%
  • Risk Rating: High
  • Distributions: Monthly
  • Distribution Yield: ~15% for CAD Series, ~20% for USD Series
  • Cold Storage: Yes
  • Stock Price: $3.43

If you are looking to invest in Bitcoin and are also looking for a source of monthly income, Purpose has designed a solution to address both through their BTCY ETF. BTCY uses a covered call strategy and holds Purpose’s other regular Bitcoin ETF, BTCC.

BTCY offers a very high annualized yield that it pays out on a monthly basis. A Bitcoin covered call strategy is able to offer such a high distribution yield because of the high volatility of the underlying asset.

In terms of assets, BTCY is a fairly small ETF. BTCY holds its Bitcoin in cold storage because BTCC, the underlying ETF, holds its Bitcoin in cold storage.

BTCY comes with higher relative fees than some of the ETFs on our list. It is currently unique in the Canadian Bitcoin space as an income-generating strategy. Be mindful that the covered call strategy can restrict the growth of the fund in the long term, especially if the price of Bitcoin rises rapidly.

If you are looking to invest in Bitcoin and generate income, BTCY is a good (and the only) option on the Canadian ETF shelf.

5. Purpose Bitcoin ETF

Purpose Investment Logo
  • Ticker: BTCC-B.TO
  • Hedged Ticker: BTCC.TO
  • US Dollar Ticker: BTCC.U.TO
  • Carbon Offset Ticker: BTCC.J.TO
  • Inception Date: February 11, 2021
  • Assets under Management: $660.7 Million
  • Management Fee: 1.00%
  • Management Expense Ratio: 1.49%
  • Risk Rating: High
  • Distributions: Annually
  • Distribution Yield: 0%
  • Cold Storage: Yes
  • Stock Price: $3.82
  • YTD Return: -55.36%

Purpose has the most options when it comes to its Bitcoin ETF. The company’s Bitcoin ETF is a plain vanilla fund that simply tracks the price of Bitcoin. Purpose has a very robust offer because it offers its Bitcoin ETF in several formats:

  • Unhedged Canadian Dollar
  • Hedged Canadian Dollar
  • US Dollar
  • Carbon Offset

The carbon offset version allows investors to offset 100% of the carbon emission from their investment. This version of the fund is offered in Canadian dollars and unhedged. This version would be attractive for ESG-oriented investors that want to invest in Bitcoin.

In terms of assets, BTCC is a massive Bitcoin ETF here in Canada. Purpose holds the underlying Bitcoin for BTCC in cold storage.

The fees for Purpose’s Bitcoin ETF are substantially higher than those for peers on our list. This would make it difficult to consider Purpose’s fund a top contender for a Bitcoin ETF.

Purpose offers a robust Bitcoin ETF offering here in Canada that is worth considering, especially if you are ESG-minded and want to take advantage of their carbon offset series.

6. Ninepoint Bitcoin ETF

NinePoint Logo
  • Ticker: BITC.TO
  • US Dollar Ticker: BITC.U.TO
  • Inception Date: January 27, 2021
  • Assets under Management: $33.5 Million
  • Management Fee: 0.70%
  • Management Expense Ratio: 1.45%
  • Risk Rating: High
  • Distributions: Annually
  • Distribution Yield: 0%
  • Cold Storage: Yes
  • Stock Price: $7.68

Ninepoint also offers a plain vanilla Bitcoin ETF here in Canada. The fund simply tracks the underlying price movement of Bitcoin, with the cryptocurrency being held in cold storage.

The ETF is fairly small in terms of assets under management and comes with a substantially higher MER relative to its peers.

Ninepoint also offers the ETF in a US dollar version, allowing investors to add the fund to the US side of their portfolios. Ninepoint uses a portion of the fund’s management fee to offset the carbon produced by the Bitcoin held in the ETF.

Although the fund does a great job of tracking the price of Bitcoin for investors, it is difficult to recommend it as a top contender for investors because of its high fees.

7. Evolve Bitcoin ETF

Evolve ETF Logo
  • Ticker: EBIT.TO
  • US Dollar Ticker: EBIT.U.TO
  • Inception Date: February 17, 2021
  • Assets under Management: $59.7 Million
  • Management Fee: 0.75%
  • Management Expense Ratio: 1.82%
  • Risk Rating: High
  • Distributions: Annually
  • Distribution Yield: 0%
  • Cold Storage: Yes
  • Stock Price: $9.73
  • YTD Return: -57.58%

Another option for a Bitcoin ETF in Canada is Evolve’s EBIT ETF. Similar to most other Bitcoin ETFs, EBIT simply tracks the price movement of Bitcoin with no other additional features or strategies.

Evolve offers a US dollar version of their ETF, EBIT.U. This allows investors to incorporate EBIT on the US side of their accounts.

In terms of assets, EBIT is relatively small. With regards to fees, keep in mind that Evolve’s Bitcoin ETF comes with the highest management expense ratio on our list.

Similar to the other ETFs on our list, Evolve also uses cold storage for its underlying Bitcoin holdings. Despite having a relatively earlier inception date, the ETF has struggled to capture significant assets, likely due to its relatively higher fees.

Although Evolve’s Bitcoin ETF is a good vehicle for investing in Bitcoin, the substantially higher fees versus peers make it difficult to consider it seriously as a top contender for investor portfolios.

Are Bitcoin ETFs Worth the Fees?

Determining whether a Bitcoin ETF is worth the fees depends on your specific situation. Since purchasing Bitcoin through a wallet is not difficult, the key advantage of Bitcoin ETFs is their ability to be added to TFSAs and RRSPs.

For income tax purposes, the Canadian government currently treats Bitcoin as a commodity.

Within a TFSA, investing in a Bitcoin ETF allows you to avoid paying taxes on any gains, as it is a tax-exempt account.

Within an RRSP, investing in a Bitcoin ETF allows you to delay paying taxes until you withdraw your money from the account. This allows you to trade freely within without triggering capital gains.

If you have contribution room within these accounts (or other tax-advantaged investment accounts) and have allocated a portion of your investment portfolio toward Bitcoin, Bitcoin ETFs are likely worth their fees.

If you are investing in a Bitcoin ETF in a regular non-registered account, buying the cryptocurrency through a wallet is likely a better option as it allows you to avoid paying unnecessary fees.

One key risk of investing in Bitcoin within a registered account is that it can permanently reduce the size of your accounts if Bitcoin prices fall sharply (and you liquidate).

Should you Invest in Bitcoin ETFs?

Investing in Bitcoin is much different from traditional portfolio theory and involves a lot of speculation. Bitcoin is not a cash flow generating asset (such as a business), and investors are simply hoping for Bitcoin prices to rise in the future based on supply and demand.

Investors looking to invest in Bitcoin ETFs (or Bitcoin for that matter), should make sure that they:

  • Have a high or very high-risk tolerance
  • Are not looking for income (unless investing in a covered call Bitcoin ETF or a similar strategy)
  • Allocate only a small portion of their overall portfolio (or net worth) to Bitcoin as a speculative position

Instead of investing in Bitcoin and speculating on future price increases, consider the alternative. Traditional investments like stocks and bonds allow you to invest in equity or debt of real companies with growing businesses and positive cash flows. 

Strategies for Adding Bitcoin ETFs to your Portfolio

As we mentioned before, any allocation to Bitcoin within a well-built portfolio should be for speculative purposes and a small portion of your total assets. 

The majority of your investment portfolio should still be invested across a mix of:

  • Equities (stocks)
  • Fixed Income (bonds, GICs, etc.)
  • Alternatives (real estate, liquid alternatives, etc.)
  • Cash

While Bitcoin was previously an attractive addition to a portfolio because it was seen as a good diversifier (it was uncorrelated to other investments), this correlation has changed over time. Throughout the market selling of 2022, Bitcoin prices have fallen as well and become more correlated with traditional investments.

Which Canadian Bitcoin ETF is the Best?

Considering that most Bitcoin ETFs are very similar in nature, the best choice for a Bitcoin ETF is likely the one with the lowest fees. With this in mind, CI’s Galaxy Bitcoin ETF is likely the best option.

How to Buy the Best Bitcoin ETFs in Canada

The cheapest way to buy ETFs is from discount brokers. My top choices in Canada are:

Readers Choice
Qtrade
Qtrade
  • 105 commission-free ETFs to buy and sell
  • Excellent customer service
  • Top-notch market research tools
  • Easy-to-use and stable platform 
Low Fees
Wealthsimple Trade
Wealthsimple Trade
  • Stock and ETF buys and sells have $0 trading fees
  • Desktop and mobile trading
  • Reputable fintech company
  • Fractional shares available
Well-Rounded
Questrade
Questrade
  • ETF buys have $0 trading fees
  • Excellent market research tools
  • Most types of registered accounts available

To learn more, check out my full breakdown of the best trading platforms in Canada.

Conclusion

Best Bitcoin ETF in Canada

If you are looking to invest in Bitcoin and have room in tax-advantaged accounts, purchasing a Bitcoin ETF could be a good idea.

Remember that a very large Bitcoin position as a percentage of your total assets contradicts modern portfolio theory and would likely be considered speculating rather than investing.

Aside from Bitcoin ETFs, make sure to also consider potentially investing in some of the best Bitcoin stocks in Canada.

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Author Bio - Christopher Liew is a CFA Charterholder with 11 years of finance experience and the creator of Wealthawesome.com. Read about how he quit his 6-figure salary career to travel the world here.

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5 thoughts on “7 Best Bitcoin ETFs in Canada for September 2022”

  1. Aside from the MER (which I view as insurance) – is there anything that could hinder growth. So if I invest 100k into a BTC ETF – and the price of BTC goes up by 100% (doubles, 2x) – will I have close to 200k minus some fees?

    Reply
  2. How about the process of switching directly from ETF to actual tokens, if/when they finally become regulated assets and are allowed in our registered accounts? Just wondering if you foresee any risks there. I hope it will be as easy as step 1- sell ETF shares, step 2- buy BTC/ETH.

    Thanks for the article as well.

    Reply

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