8 Best Crypto ETFs in Canada 2021: No-Hassle Buying

Are you wondering what the best crypto ETFs in Canada are? The cryptocurrency space has been booming over the last few years, with the world’s most popular cryptocurrency, Bitcoin, peaking at over $64,000 on April 14, 2021, before dialling down a notch.

The advent of crypto ETFs in Canada through the first Bitcoin ETF in February 2021, followed by Ether ETFs in April 2021, led to the cryptocurrency investing space becoming busier.

Before 2021, cryptocurrency investors had to sign up with a cryptocurrency exchange, buy the coins, and worry about storing their holdings safely.

All of that changed with the launch of several cryptocurrency ETFs in Canada in 2021 because it made investing in cryptocurrencies a lot easier.

In this post, I will cover the best cryptocurrency ETFs available to Canadian investors and how to buy them so that you can make an informed decision if you choose to invest in cryptocurrency ETFs.

Best Crypto ETFs In Canada

What Are Cryptocurrency ETFs?

Before I get into the list of the cryptocurrency ETFs in Canada, let’s take a look at what they are.

Exchange-Traded Funds are typically considered as an ideal way to get exposure to a basket of securities to investors, allowing them to diversify their capital allocation across several securities.

Most ETFs offer a relative degree of safety to investors by diversifying their funds into different assets. If the price of one of the securities within the fund’s portfolio declines, the price of other commodities can offset the losses for investors.

You don’t have to worry about buying individual securities and maintaining a balance in your portfolio to align with your financial goals and risk tolerance.

However, cryptocurrency ETFs paint a different picture. When you buy cryptocurrency ETFs, you gain exposure to the underlying cryptocurrency. So far, there are only two broad types of cryptocurrency ETFs in Canada – Bitcoin and Ethereum ETFs.

These ETFs invest directly in the physically settled cryptocurrencies and holds them in cold storage on your behalf. When you purchase a crypto ETF, you are buying the digital asset which is being held by a third party. The value of your holdings will vary based on the performance of the underlying cryptocurrency.

Do not confuse crypto ETFs with blockchain ETFs. Blockchain ETFs have holdings in companies that develop or use blockchain technologies – they don’t specifically invest in cryptocurrencies.

The Best Crypto ETFs in Canada

Crypto ETFs trade on the stock market like securities that you can easily buy and sell without worrying about signing up to a cryptocurrency exchange or facing considerable delays that are a notorious feature for cryptocurrency exchanges.

You can simply purchase a crypto ETF using a brokerage account with a trading platform of your choice.

I have divided the list into two categories for Bitcoin ETFs and Ether ETFs to help you find the right ETF for your preferred cryptocurrency.

Best Bitcoin ETFs in Canada

There are presently four Canadian Bitcoin ETFs available for you to invest in:

1. Purpose Bitcoin ETF

Key facts about Purpose Bitcoin ETF as of August 25, 2021:

  • Ticker: BTCC, BTCC.B, BTCC.U
  • Inception date: February 11, 2021
  • Assets Under Management (AUM): $1.3 billion
  • Management Fee: 1.00%

Purpose Bitcoin ETF (BTCC) holds the title of the first cryptocurrency ETF in Canada and the world. The ETF was widely embraced after its launch and rapidly managed to cross the $1 billion AUM mark within a month of its inception.

The fund was the first ETF to keep 100% of its holdings in cold storage, and you can purchase it in both registered and non-registered investment accounts.

The current management fee is 1.00%, and its MER is capped at 1.50%. The ETF launched a few months ago at writing, and its performance and returns will not be available until February 2022.

Like its peers in the list, BTCC ETF is a high-risk fund because it is fully invested in a single digital asset, and it does not offer any diversification across cryptocurrencies or in general.

2. Evolve Bitcoin ETF

Key facts about Evolve Bitcoin ETF as of August 25, 2021:

  • Ticker: EBIT, EBIT.U
  • Inception date: February 17, 2021
  • Assets Under Management (AUM): $117.010 million
  • Management Fee: 0.75%

Evolve Bitcoin ETF (EBIT) is another Bitcoin ETF launched in Canada that is available for registered and non-registered accounts. The management fee for EBIT is 25 basis points lower than for BTCC ETF at 0.75%.

Launched almost a week after BTCC ETF, Evolve Bitcoin ETF holds the title for being world’s the second cryptocurrency ETF.

The performance and returns data for the ETF will not be available until February 2022, a year after its inception. It is a high-risk asset to add to your investment portfolio because the fund invests solely in Bitcoin.

3. CI Galaxy Bitcoin ETF

Key facts about CI Galaxy Bitcoin ETF as of August 24, 2021:

  • Ticker: BTCX.B, BTCX.U
  • Inception date: March 5, 2021
  • Assets Under Management (AUM): $347.221 million
  • Management Fee: 0.40%

CI Galaxy Bitcoin ETF (BTCX) provides you with exposure to Bitcoin and is currently the best cryptocurrency ETF if you are looking for the lowest management fees. At 0.40%, it charges the lowest management fees among its peers while offering the same advantages.

You can buy this fund in a registered or non-registered investment account. As per CI Global Asset Management’s website, the MER for the fund is capped at 0.95%. Data for its performance and returns will not be available until March 22.

4. 3iQ CoinShares Bitcoin ETF

Key facts about 3iQ CoinShares Bitcoin ETF as of August 24, 2021:

  • Ticker: BTCQ, BTCQ.U
  • Inception date: March 31, 2021
  • Assets Under Management (AUM): $1.222 billion
  • Management Fee: 1.00%

3iQ CoinShares Bitcoin ETF (BTCQ) is a Bitcoin ETF offered by 3iQ Digital Asset Management in partnership with CoinShares. The fund charges the same management fees as BTCC, but its MER is capped at 1.25%. You can buy the fund in both registered and non-registered accounts.

Data for its performance and returns will not be available until March 2022, when it completes a year of trading on the TSX.

Best Ether ETFs in Canada

There are currently four Ether ETFs in Canada, and they are all offered by the same investment firms that offer the Bitcoin ETFs listed above.

5. Purpose Ether ETF

Key facts about Purpose Ether ETF as of August 25, 2021:

  • Ticker: ETHH, ETHH,B, ETHH.U
  • Inception date: April 16, 2021
  • Assets Under Management (AUM): $259.3 million
  • Management Fee: 1.00%

Ether, the cryptocurrency on the Ethereum blockchain, is the second-most popular cryptocurrency after Bitcoin, and several investment firms are now offering Ether ETFs. Purpose Ether ETF (ETHH) launched on April 16, 2021. The management fee for ETHH is 1.00%, and its MER is capped at 1.50%.

You can buy the fund in registered and non-registered accounts. The data for its performance and returns will not be available until April 2022, when the fund completes one year of trading on the TSX.

6. Evolve Ether ETF

Key facts about Evolve Ether ETF as of August 25, 2021:

  • Ticker: ETHR, ETHR.U
  • Inception date: April 19, 2021
  • Assets Under Management (AUM): $74.151 million
  • Management Fee: 0.75%

Evolve Ether ETF (ETHR) follows the CME CF Ether-Dollar Reference Rate benchmark index and is available in CAD and USD on the TSX. You can also trade the fund using options on the Montreal Exchange. The fund is available to buy in registered and non-registered investment accounts.

The data for its performance and returns will not be available until April 2022, when it completes a year of trading on the TSX. Since the fund allocates 100% of its assets into Ether, you can expect its performance to align with that of the underlying cryptocurrency.

7. CI Galaxy Ethereum

Key facts about CI Galaxy Ethereum as of August 24, 2021:

  • Ticker: ETHX.B, ETHX.U
  • Inception date: April 16, 2021
  • Assets Under Management (AUM): $688.570 million
  • Management Fee: 0.40%

CI Galaxy Ethereum ETF (ETHX.B), similar to its Bitcoin ETF offering, boasts the lowest management fee for an Ether ETF in this list. Its management fee is just 0.40% per year, and its MER is not expected to exceed 0.95%.

The fund is available to buy in a registered or non-registered trading account like a TFSA or an RRSP. Like its peers, data for the performance and returns will not be available for the fund until it completes a year of trading on the TSX in April 2022.

8. 3iQ CoinShares Ether ETF

Key facts about 3iQ CoinShares Ether ETF as of August 25, 2021:

  • Ticker: ETHQ, ETHQ.U
  • Inception date: April 19, 2021
  • Assets Under Management (AUM): $341.184 million
  • Management Fee: 1.00%

The 3iQ CoinShares Ether ETF (ETHQ) is the fourth Ether ETF to get approval in 2021. It is listed on the TSX in CAD and USD and comes with a management fee of 1.00%. ETHQ is available to buy in a registered and non-registered account.

It means that you can buy and hold it in a TFSA or an RRSP to leverage tax-free returns.

Like its peers, ETHQ is a high-risk asset that invests 100% of its funds in a single digital asset. It means that the fund’s valuation can rise and fall based on the value of the underlying cryptocurrency. The data for its performance and returns will not be available until it completes a year of trading on the TSX in April 2022.

Benefits Of Buying Canadian Crypto ETFs

Traditionally, investing in cryptocurrencies is not straightforward. There are several things you need to consider, such as which cryptocurrency exchange you should buy from, and how to store and safeguard your cryptocurrency investments in a digital wallet.

Cryptocurrency ETFs in Canada eliminate all the challenges and concerns you might face.

The convenience of buying cryptocurrency ETFs through your existing brokerage account might be the most important benefit of these new ETFs.

Additionally, you can also buy and hold them in registered accounts like the Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) and enjoy tax-sheltered returns on your investments.

Anybody with a brokerage account can now start investing in the asset class in any of their investment accounts with very little money. However, you should know that only the two largest cryptocurrencies, Bitcoin and Ether, are available as ETFs right now.

Provided that these cryptocurrency ETFs are successful, you might be able to invest in cryptocurrency ETFs for other cryptocurrencies in the future.

It is possible that a cryptocurrency ETF that tracks several cryptocurrencies will come at some point. That way, investors can buy a single ETF to gain exposure to a basket of cryptocurrencies in a single fund instead of purchasing multiple ETFs.

Drawbacks Of Buying Canadian Cryptocurrency ETFs

Cryptocurrencies are a high-risk asset class that experiences significant price volatility. These digital assets are not suitable for investors with low risk tolerance.

Since the cryptocurrency ETFs allocate 100% of their funds into the underlying cryptocurrency, the funds are also subject to the same risk levels as the cryptocurrencies they hold.

The management fees charged by these funds also eat into your returns. For instance, BTCC can charge up to a 1.50% MER, equivalent to $15 in fees per $1,000 of investments per year.

How To Buy Crypto ETFs in Canada

You can purchase crypto ETFs on most Canadian brokerage platforms that offer stock and ETF trading. Here are my two favourite ways to buy crypto ETFs in Canada:

ImageProduct TitleFeaturesPrice
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Wealthsimple Trade
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Questrade
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Conclusion

It is possible for you to directly invest in cryptocurrencies as a Canadian investor through platforms like Wealthsimple Crypto if you’re looking to diversify your investment portfolio with another asset class.

Cryptocurrency ETFs offer you the opportunity to diversify your investment portfolio by giving you greater accessibility to the asset class while retaining the liquidity of traditional securities that trade on the TSX.

But remember that cryptocurrencies are very volatile and these assets are prone to significant intraday price changes.

Understand your risk tolerance and keep this in mind about this asset class when deciding how much you want to allocate to it.

If you want to decide on which trading platform to use to invest in crypto ETFs in Canada, you should check out my full breakdown of the best trading platforms in Canada here.

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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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