12 Best Crypto ETFs in Canada for April 2024

If you are looking to add cryptocurrency exposure to your investment portfolio, a crypto ETF is a good option to consider.

As a reminder of crypto’s extreme volatility, in the first half of 2022, the cryptocurrency sector lost US$1 trillion in value while Canadian investors were rushing to invest in crypto ETFs.

We will cover some of the best crypto ETFs in Canada below and go through some of their features.

What are Crypto ETFs?

Crypto ETFs allow investors to access cryptocurrencies through a formal fund structure. These ETFs typically hold the underlying cryptocurrency in cold storage and can be a substitute for buying the cryptocurrencies through a wallet.

Various crypto ETFs exist but the largest ones (and the ones with the most traction) focus on Ether and Bitcoin.

Pros and Cons of Crypto ETFs

Investing in crypto through an ETF comes with advantages and disadvantages, especially relative to buying the cryptocurrency outright. Some of these pros and cons are also faced when buying cryptocurrencies through a wallet.

Investing the bulk of your money in cryptocurrencies is extremely risky and will not do a good job of replacing a well-constructed investment portfolio.

The Best Crypto ETFs in Canada

• CI Galaxy Bitcoin ETF (BTCX-B.TO)
• Fidelity Advantage Bitcoin ETF (FBTC.TO)
• 3iQ CoinShares Bitcoin ETF (BTCQ.TO)
• Purpose Bitcoin Yield ETF (BTCY-B.TO)
• Purpose Bitcoin ETF (BTCC-B.TO)
• Ninepoint Bitcoin ETF (BITC.TO)
• Evolve Bitcoin ETF (BIT.TO)
• CI Galaxy Ethereum ETF (ETHX-B.TO)
• Purpose Ether ETF (ETHH-B.TO)
• Evolve Ether ETF (ETHR.TO)
• 3iQ CoinShares Ether ETF (ETHQ.TO)
• Evolve Cryptocurrencies ETF (ETC.TO)

Best Bitcoin ETFs in Canada

1. CI Galaxy Bitcoin ETF

CI’s BTCX focuses on tracking the price movement of Bitcoin and does not offer investors any additional features. 

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. 

As the lowest-fee Bitcoin ETF in Canada, BTCX is a top choice for Bitcoin investors looking to add exposure through a fund.

2. Fidelity Advantage Bitcoin ETF

Fidelity’s FBTC ETF is designed to track the price of Bitcoin, minus any fees.

FBTC is very small in terms of assets under management, likely because it was launched much later than its peers here in Canada. 

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

3. 3iQ CoinShares Bitcoin ETF

A much less well-known asset manager in Canada is 3iQ. As a result of gathering significant assets across their Bitcoin and Ether funds, 3iQ is 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. The fund holds its Bitcoin in cold storage.

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

Offered at a much higher fee than its peers, BTCQ is tough to recommend as a top Bitcoin ETF due to the additional expenses.

4. Purpose Bitcoin Yield ETF

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. 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.

In terms of assets, BTCY is a fairly small ETF. Since the underlying fund holds Bitcoins in cold storage, BTCY does by extension.

The ETF 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.

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 offers the most options through its Bitcoin ETF. The company’s fund 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. 

In terms of assets, BTCC is a massive Bitcoin ETF here in Canada. The fund’s underlying Bitcoin is held in cold storage.

BTCC’s fees are substantially higher than those for peers on our list.

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 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’s EBIT ETF is another option to consider for Bitcoin exposure. 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 which 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.

Evolve’s EBIT ETF uses cold storage for its underlying Bitcoin holdings. 

Although Evolve’s Bitcoin ETF is a good vehicle for investing in Bitcoin, its relatively high fees make it difficult to consider as a top option for your portfolio.

Best Ethereum ETFs in Canada

8. CI Galaxy Ethereum ETF

CI offers an Ether ETF to Canadians in both Canadian dollars as well as US dollars. The US dollar series of the ETF will have to be purchased on the US side of your investment accounts. The Canadian dollar series is unhedged and will be impacted by fluctuations between the US dollar and the Canadian dollar. 

ETHX is a plain vanilla Ether fund and simply tracks the price movement of the cryptocurrency. The fund stores the underlying Ether in cold storage.

The fund is very large in terms of assets under management and is the lowest-cost Ethereum ETF option for Canadians. 

ETHX is a top option to consider if you are looking for an Ether ETF as it comes with the lowest fees in Canada.

9. Purpose Ether ETF

Purpose also offers a fairly robust Ether ETF on the Canadian ETF shelf. Trading under the ticker ETHH, the fund comes in a hedged, unhedged, US dollar, and carbon offset series.

ETHH is another plain vanilla Ethereum fund that tracks the price movement of Ether. It stores its Ether in cold storage.

The US dollar version of the fund will have to be purchased on the US side of your accounts here in Canada. 

Purpose’s Ether ETF is unique because of its carbon offset series. This series uses the fees that it generates to offset the carbon produced by its fund.

The ETF is large in terms of assets and is substantially more expensive than CI’s Ethereum ETF. 

Purpose’s Ethereum ETF is a good option to consider if you are focused on investing responsibly and want to access the carbon offset series.

10. Evolve Ether ETF

Evolve is another key player in the Ethereum ETF space in Canada.

ETHR is available in a Canadian dollar unhedged series as well as a US dollar series. The US dollar series can be added to the US side of your investment accounts. 

ETHR is another simple Ether fund that tracks the price movement of Ether. 

The ETF stores its Ether in cold storage, similar to the other ETFs on our list. This is the safest approach for holding the cryptocurrency.

ETHR is small in terms of assets under management and is substantially more expensive than CI’s Ether fund.

Evolve’s ETHR ETF is an option to consider on the Canadian shelf, but its high fees and lack of features make it hard to consider as a top choice.

11. 3iQ CoinShares Ether ETF

3iQ’s Ether ETF, ETHQ, is a plain vanilla Ether fund tracking the price movement of the cryptocurrency.

ETHQ is available in an unhedged Canadian dollar series and a US dollar series. The US dollar series will have to be purchased on the US side of your investment accounts.

Similar to other Ether ETF providers in Canada, 3iQ’s ETF stores its Ether in cold storage. This is the safest approach to storing the cryptocurrency.

ETHQ is currently the smallest Ether ETF in Canada based on assets under management and is also the second most expensive option.

Given ETHQ’s high relative fund fees, it is again difficult to pick it as a top option for a Canadian Ether ETF.

Best Mixed Crypto ETF in Canada

12. Evolve Cryptocurrencies ETF

If you are looking for an ETF that invests in both Bitcoin and Ether, Evolve is currently the only investment manager to offer one in Canada.

ETC invests in Bitcoin and Ether through Evolve’s single cryptocurrency ETFs, EBIT, and ETHR. Currently, ETC has a larger allocation towards Bitcoin, with the allocation adjusting over time based on the total market capitalization of both cryptocurrencies.

ETC is available in an unhedged Canadian dollar series and a US dollar series. The US dollar series will have to be purchased on the US side of your investment accounts. Both cryptocurrencies are stored offline in cold storage.

The ETF is very small in terms of assets and is also fairly expensive in terms of fees.

Since ETC comes with high total fees, it may make more sense to buy a cheaper individual Bitcoin and Ether ETF instead.

Are Crypto ETFs Worth the Fees?

Whether a crypto ETF is worth its fees depends on your particular circumstances. Since buying cryptocurrencies directly is not difficult, the key advantage of a crypto ETF is its ability to be included in tax-preferred accounts.

The Canadian government, for income tax purposes, treats cryptocurrencies like a commodity. 

If you are adding a crypto ETF to a TFSA, you will be able to avoid paying taxes on any future gains.

Inside of an RRSP, you can trade a crypto ETF freely without any tax consequences (until you withdraw money from the account). 

Investors with space within a tax-preferred account may find crypto ETFs to be extremely valuable. If you are thinking of investing in crypto in a non-registered account, it may be better to buy the cryptocurrency directly through a wallet.

Strategies for Adding Crypto ETFs to your Portfolio

Your portfolio allocation towards crypto should be for speculative purposes and not a large portion of your account. 

A professionally-built investment portfolio usually consists of:

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

Over the last few years, cryptocurrencies have been considered portfolio diversifiers due to their low correlation with traditional assets. In the first half of 2022, cryptocurrencies have fallen in value at the same time as broader markets.

Regulatory Aspect of Crypto ETFs

The growing popularity of cryptocurrencies and their acceptance in mainstream investment avenues has led regulatory bodies worldwide to adopt a closer view. In Canada, the regulatory framework has been relatively progressive.

The Canadian Securities Administrators (CSA) and the Investment Industry Regulatory Organization of Canada (IIROC) jointly work on the guidelines for crypto ETFs. These might include:

• Transparency: All crypto ETF providers must ensure transparency in their operations, from the assets they hold to their valuation and custody arrangements.
• Custody: Due to the digital nature of cryptocurrencies, secure custody is paramount. Regulatory bodies ensure that ETF providers have adequate custodial services, often in the form of cold storage solutions.
• Risk Disclosure: Given the volatile nature of cryptocurrencies, crypto ETF providers are required to include comprehensive risk disclosure statements. This ensures that investors are aware of potential market, liquidity, and technological risks.

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Crypto ETFs and the Future of Digital Asset Investment

The inception of crypto ETFs marks a significant milestone in the mainstream acceptance of digital assets. These ETFs offer traditional investors an entry point into the world of cryptocurrencies without the need to delve into the complexities of direct crypto trading or understanding blockchain technology in-depth.

So, what does the future hold?

• Diversification: As the crypto realm evolves, future crypto ETFs might not just focus on Bitcoin and Ethereum. We can expect more diversified ETFs that offer exposure to a broader range of digital assets or even specific sectors within the crypto space, such as DeFi (Decentralized Finance) or NFTs (Non-Fungible Tokens).
• Innovation: Crypto ETF providers might explore innovative strategies, such as staking, where certain cryptocurrencies are held in a way that earns additional rewards, further increasing potential returns for investors.
• Global Participation: As more countries establish regulatory frameworks conducive to crypto ETFs, there’s potential for these funds to become globally integrated, providing investors with a more comprehensive view of the digital asset market.

How to Buy the Best Crypto ETFs in Canada

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

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

Conclusion

Investors with space in tax-preferred accounts may find crypto ETFs to be extremely useful.

Remember to keep your crypto allocation small and as a part of the speculative bucket of investments within your portfolio.

As a potential alternative to crypto ETFs, you may also want to consider the best crypto mining stocks in Canada.