If you have had an interest in investing in Bitcoin, you might finally have the chance to gain exposure to the cryptocurrency without the worry of losing your private keys or getting hacked.
Purpose Investments became the company to launch the world’s first Bitcoin ETF in February 2021.
Bitcoin is an asset class that is extremely risky but intriguing. The launch of this ETF has made it more accessible to investors, and it is natural to want to know more about whether it’s a worthwhile investment.
My BTCC ETF review will cover everything you need to know about its asset allocation, fees, returns, pros, and cons, and how you can purchase it in Canada.
Invest In Bitcoin
Gain exposure easily to the world’s first cryptocurrency through the first cryptocurrency ETF approved in Canada.
- Easy to trade and gain exposure to Bitcoin, even if you’re new to cryptocurrencies.
- Sold on regulated brokerage platforms with access to CIPF protection.
- Better liquidity than buying the commodity itself.
- Can be held in registered investment accounts for tax-free gains.
- Eliminates the need to create your own wallet to store the cryptocurrency.
- Volatile and risky asset.
- High management fees.
What Is Purpose Bitcoin BTCC ETF?
Purpose Bitcoin BTCC ETF is an Exchange-Traded Fund that offers investors easier exposure to Bitcoin in the form of a publicly traded security available on the Toronto Stock Exchange.
Similar to purchasing popular commodity ETFs on the TSX, Purpose Bitcoin ETF provides you with exposure to actual Bitcoin without you having to buy the cryptocurrency yourself.
Launched by Purpose Investments in February 2021, BTCC ETF became the world’s first Bitcoin ETF. The fund holds 26,729.811205 BTC units as of July 29, 2022, bringing the assets under management over $639.1M.
These features of the underlying commodity held by the fund significantly increase the volatility of the ETF.
BTCC ETF trades on the TSX under three different tickers:
- BTCC: Purchased with Canadian dollars and hedged against US dollar exposure.
- BTCC.B: Also purchased using Canadian dollars but does not hedge against US dollar fluctuations.
- BTCC.U: Denominated in US dollars.
BTCC Key Facts:
As of July 29, 2022:
- Ticker Symbol: BTCC.TO, BTCC-B.TO, BTCC-U.TO
- Exchange: Toronto Stock Exchange
- Inception Date: February 18, 2021
- Assets Under Management: US$639.1M
- Management Fee: 1.00%
- MER: 1.49%
- Currency Traded: CAD
- Eligible Accounts: Most registered (TFSA, RRSP, etc) and non-registered available
BTCC ETF Price
|BTCC is currently trading at close to:|
BTCC MER and Fees
The management fee for BTCC ETF is 1.00%, and the Management Expense Ratio (MER) for the cryptocurrency is 1.49%, which is quite high.
Here is a hypothetical growth of $10,000 invested in BTCC since inception:
What Does BTCC ETF Invest In?
BTCC ETF allocates 100% of its funds in “physically settled” Bitcoin. It means that Purpose Bitcoin ETF holds no other assets besides Bitcoin.
Holding BTCC worth a certain price in your investment portfolio is the equivalent of holding the same number of Bitcoin units that you would get if you purchased the commodity.
BTCC Top 10 Investments
As of Dec 31, 2021:
|Company||% of Net Asset Value|
|Total percentage of top 10 investments||100.00%|
|Total number of investments||1|
BTCC Investment Mix
As of Dec 31, 2021:
|Sector||% of Net Asset Value|
|Cash & Cash Equivalents||0.21%|
BTCC Compound Returns
As of June 30, 2022:
|ETF (FX Hedged)||-40.85%||-60.71%||-61.05%||-59.93%||-47.95%||-51.66%|
|ETF (Non-FX Hedged)||-39.32%||-58.78%||-59.90%||-58.42%||-44.42%||-53.03%|
BTCC Diversification with low correlation to other assets
|ASSET CLASS||1 YEAR||3 YEAR||5 YEAR|
|Canadian Fixed Income||-0.03||0.14||0.11|
How Does The BTCC ETF Work?
Usually, ETFs diversify your money across multiple investments that are related by industry or geography. However, BTCC ETF only invests your cash in Bitcoin.
Considering that cryptocurrencies are not yet available as a recognized currency by traditional brokerages and banks, it is the only way for a retail investor to purchase Bitcoin on the stock market.
Purpose Bitcoin ETF is the first ETF in the world to be physically backed by Bitcoin and not derivatives, making it similar to gold and silver ETFs already trading on the TSX.
BTCC will allow retail investors to invest in Bitcoin without having to purchase and store the digital currency themselves.
When you buy the ETF, Purpose Investments purchase Bitcoin with your money. By holding the ETF, you essentially hold actual Bitcoin in your portfolio.
Is BTCC.B Safe?
Buying BTCC ETF solves several problems that cryptocurrency investors face while buying Bitcoin by making it available on the TSX. Before Purpose Bitcoin ETF came along, people investing in Bitcoin had to purchase it on cryptocurrency trading platforms that are separate from their regular brokerage.
These platforms have a reputation for being slow, buggy, and vulnerable to hackers who are always looking for an easy way to make financial gains at the expense of other people.
Users typically find themselves waiting several days for their transfers to be accepted so that they can deposit money into their accounts for trading. Unfortunately, it also means that Bitcoin holders are unable to sell and withdraw their holdings on time to capture profits.
Buying and selling Bitcoin on the TSX through BTCC, BTCC.B, and BTCC.U allows you to buy and sell your exposure to Bitcoin without experiencing the lag and delays that are a notorious quality for cryptocurrency trading platforms.
Getting exposure to Bitcoin in the form of a more liquid ETF also means that you can withdraw any amount at any time by simply selling your BTCC shares on the market.
Security risks are a primary concern for cryptocurrency investors because holders are solely responsible for protecting and storing their cryptocurrency in digital wallets.
Unfortunately, people have lost a significant portion of their cryptocurrency holdings due to security issues. It is estimated that up to 20% of all Bitcoin has been lost forever due to issues like people forgetting their passwords or accidentally deleting their digital wallets.
Since the blockchain technology used to secure Bitcoin is highly effective, locking yourself out of your digital wallet means that your cryptocurrency holdings in that wallet are pretty much gone forever.
Fortunately, recovering passwords for brokerage accounts is much easier. Since the securities you buy with your brokerage account are not stored on your computer, you will never accidentally delete your ETF holdings.
Additionally, Purpose Bitcoin ETF offers greater security for your Bitcoin by storing most of the Bitcoin that the fund buys with your money in cold storage, keeping it safe from hackers and data breaches.
BTCC Risk Indicator
The fund comes with a high-risk rating due to the volatility of the underlying asset. Bitcoin and other cryptocurrencies are an extremely volatile asset class with substantial intraday increases or decreases in valuations.
How To Buy BTCC ETF In Canada
The cheapest way to buy ETFs is from discount brokers. My top choices in Canada are:
- 105 commission-free ETFs to buy and sell
- Excellent customer service
- Top-notch market research tools
- Easy-to-use and stable platform
- Stock and ETF buys and sells have $0 trading fees
- Desktop and mobile trading
- Reputable fintech company
- Fractional shares available
- 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.
BTCC Purpose Bitcoin ETF is an excellent option for investors who want exposure to Bitcoin without facing the challenges and several risks associated with buying the cryptocurrency. Buying shares of the ETF means that the fund will handle it all for you.
Additionally, buying and holding BTCC ETF in your investment portfolio lets you get more liquid exposure to the cryptocurrency.
Perhaps the biggest advantage of BTCC ETF is that investors can buy and hold the ETF in registered accounts like a Tax-Free Savings Account (TFSA) or a Registered Retirement Savings Plan (RRSP) to enjoy tax-sheltered returns from their investment.
While the ETF makes it easier than ever to invest in Bitcoin, it does not eliminate the risks of investing in cryptocurrency.
If you are an investor with the stomach to bear the volatility that comes with investing in cryptocurrencies, it’s not a bad idea to add a small amount of cryptocurrency to your portfolio through BTCC ETF. However, I would recommend focusing the bulk of your wealth on more traditional assets in the stock market.
Want more options? Learn about the best bitcoin stocks here.