Similar to mutual funds, an ETF is a fund that you can purchase shares in. These types of funds have a fund manager to manage the assets within them and there are usually management fees for trades.
Mutual funds usually contain individual stocks that the manager selects. These funds are actively managed and are not always available to trade on a stock exchange.
ETFs are usually passively managed because they track the price of indexes or sectors. With ETFs, Canadians can trade shares usually for free depending on your brokerage account, on stock exchanges.
There are many ETFs available for Canadian investors, and each fund will be specific, tracking the underlying assets. For example, you can buy shares in the S&P 500 index fund, which tracks the price of the top 500 US companies.
ETFs For Spreading Risk
ETFs are a great way to manage risk, because a fund usually holds hundreds or even thousands of different stocks, so your money and risk is spread out.
There are many different types of ETFs to suit investors, and, in 2021, Canada became the first country to offer bitcoin ETFs. These ETFs track the underlying cryptocurrency, in this case, bitcoin.
A bitcoin fund invests solely in bitcoin. The “bigger” the fund, the more bitcoins within it.
When you purchase shares in a cryptocurrencies ETF, your shares will follow the price of the asset as it goes up and down on the cryptocurrency market.
Since then, several other cryptocurrency ETFs have emerged, which also track the underlying cryptocurrency.
Types of Exchange Traded Funds
Since Ethereum’s rise in popularity and its domination in decentralized finance, play-to-earn games and NFTs, it makes sense that many traditional investors would want exposure to Ethereum too.
There are now Ethereum ETFs, which track the price of Ethereum’s cryptocurrency, Ether (ETH).
How to Invest In Cryptocurrency ETFs in Canada?
Purchasing shares in crypto ETFs is straightforward. It is no different to purchasing shares in any other stock or ETF.
You can buy ETFs easily using your stock broker such as Wealthsimple or Questrade. Sign up if you haven't already. Wealthsimple is a better option due to its lower fees for Canadian crypto ETFs.
Next, you can fund your account via a bank transfer. This could take several days to clear.
After that, you can set up your brokerage account. Questrade and Wealthsimple both offer TFSA, RRSP, and personal accounts. You can buy crypto ETFs within any of these accounts and the process is the same for each.
Keep in mind that each of these account types will have different tax implications. Any gains within a TFSA will be tax-free, but you will have limited contribution room each year.
How to Buy Crypto ETFS?
Once you have opened your account, you can search for the crypto ETF you want to invest in. Purchase your shares and when the underlying cryptocurrency goes up or down, so will your investment.
Unlike others that track index funds, there are usually management fees involved with these crypto ETFs, but you can sell your shares at any time.
Most Popular Canadian Crypto ETFs
There are now many different cryptocurrency ETFs that invest solely in the underlying cryptocurrency.
In this article we will cover some of the best cryptocurrency ETFs in Canada that can be traded on the Toronto Stock Exchange (TSX). Both bitcoin and Ethereum funds are on the list.
Fees
Keep in mind the management fees for these ETFs. The Management Expense Ratio (MER) is the management fee plus sales tax and any other operating expenses.
Volatility
Also beware that unlike some blue-chip Canadian securities, crypto is a volatile digital asset.
You may not earn a monthly yield at all, and the prices of these crypto ETFs are affected by the crypto markets overall. Crypto assets fluctuate every second of the day and the markets never close. Still, exposure to a cryptocurrencies ETF can be a good choice for a diversified investment portfolio.
The cryptocurrency industry is far more risky than the stock market, so keep in mind that your crypto assets may gain or lose value daily.
Crypto ETF Canada Hedged and Unhedged
You can buy Canadian hedged (CAD hedged) ETFs, or Canadian unhedged (CAD unhedged) crypto ETFs. Some of these ETFs will also be available in US dollars.
For simplicity, we have included only the CAD unhedged versions in our list, but the funds are largely the same for each type. The difference is that with unhedged versions you are not protected against negative currency fluctuations, but you will benefit from positive currency fluctuations.
Here is our list of the best cryptocurrency ETFs in Canada.
Best Bitcoin ETFs in Canada
Purpose Investments: Purpose Bitcoin ETF (BTCC)
- Assets under management: Bitcoin
- Fund value: $1.4B
- Shares per BTC: 6,293
- Management fee: 1%
- Launch Date: 17 February 2021
The Purpose Investments ETF was the first bitcoin ETF offering in the world. It launched on the TSX in February 2021.
BTCC holds more than $1.4B worth of BTC making it the largest cryptocurrency ETF in the world.
The fee is slightly higher than other crypto ETFs at 1%, but due to the fund’s large size, the fee is worth it for peace of mind. The Management Expense Ratio (MER) is capped at 1.5%.
This ETF lost 12% in its first year but it is one of the best crypto ETFs in Canada and suitable for any investment portfolio. You can get it on Wealthsimple.
Evolve Funds Group Inc: Evolve Bitcoin ETF (EBIT)
- Assets under management: Bitcoin
- Fund value: $96.5M
- Shares per BTC: 2,662
- Management fee: 0.75%
- Launch Date: 18 February 2021
The Evolve Bitcoin ETF is another popular ETF that tracks bitcoin. It launched shortly after BTCC, and it contains a fund worth $96.5M.
At a slightly lower fee than the Purpose Bitcoin ETF, the Evolve cryptocurrencies ETF (EBIT) is a good choice for Canadians looking for exposure to bitcoin trading and the crypto market without dealing with crypto exchanges and purchasing digital assets themselves.
The EBIT ETF lost 11% in its first year. You can get it on Wealthsimple.
Fidelity Advantage Bitcoin ETF (FBTC)
- Assets under management: Bitcoin
- Fund value: $35.7M
- Shares per BTC: 2,960
- Management fee: 0.40%
- Launch Date: 30 November 2021
The Fidelity Investments Advantage Bitcoin ETF offers a much lower management fee than other Bitcoin ETFs at just 0.40% making it an attractive crypto ETF that tracks the price of bitcoin.
Performance data is not available yet for this ETF as it’s less than one year old. You can get it on Wealthsimple.
CI Global Asset Management: CI Galaxy Bitcoin ETF (BTCX)
- Assets under management: Bitcoin
- Fund value: $323M
- Shares per BTC: N/A
- Management fee: 0.40%
- Launch Date: 5 March 2021
The CI Galaxy fund is another crypto ETF with a relatively low management fee at 0.4%.
The fund is quite large with net assets worth over $323M.
This fund lost 12.3% in its first year since launch but it is one of the best bitcoin ETFs. You can get it on Wealthsimple.
3iQ Corp: 3iQ CoinShares Bitcoin ETF (BTCQ)
- Assets under management: Bitcoin
- Fund value: $796M
- Shares per BTC: 6,011
- Management fee:1%
- Launch Date: 19 April 2021
The 3IQ CoinShares Bitcoin ETF is another large bitcoin ETF but it comes with a management fee of 1%.
This fund lost 13% in its first year. You can get it on Wealthsimple.
Best Ethereum ETFs in Canada
Purpose Ether ETF (ETHH)
- Assets under management: Ether
- Fund value: $420M
- Shares per ETH: 291
- Management fee: 1%
- Launch Date: 20 April 2022
The Purpose Investments Ethereum ETF is the world’s first Ethereum ETF.
With a large fund holding $420M worth of Ether, this Purpose Ether ETF is one of the best crypto ETFs for exposure to the crypto market. You can get it on Wealthsimple.
Evolve Ether ETF (ETHR)
- Assets under management: Ethereum
- Fund value: $58M
- Shares per ETH: 281
- Management fee: 0.75%
- Launch Date: 19 April 2021
The Evolve Ether ETF is one of the best cryptocurrency ETFs to gain exposure to Ethereum. With a 0.75% management fee, this ETF is slightly cheaper than others, but the fund is smaller. You can get it on Wealthsimple.
3iQ CoinShares Ether ETF (ETHQ)
- Assets under management: Ethereum
- Fund value: $221M
- Shares per ETH: 247
- Management fee:1%
- Launch Date: 2 June 2021
The 3IQ CoinShares Ether ETF launched a year ago and due to market conditions, it has lost 33% of its value in one year.
Still, it is a large cryptocurrency ETF with a large fund and if you believe in the price of Ethereum going back up, then this cryptocurrency ETF is a good choice. You can get it on Wealthsimple.
CI Galaxy Ethereum (ETHX)
- Assets under management: Ethereum
- Fund value: $411M
- Shares per ETH: N/A
- Management fee: 0.4%
- Launch Date: 16 April 2021
The fourth Ether ETF in our list is the CI Galaxy Ethereum ETF has a smaller management fee than some of the other cryptocurrency ETFs at just 0.4%.
It also holds a large amount of Ethereum making it an ideal ETF to gain exposure to Ethereum. You can get it on Wealthsimple.
Bitcoin and Ethereum ETFs
There are some multi-currency ETFs for people who would like to gain exposure to multiple cryptocurrencies.
While these funds are still risky and volatile, the benefit is that you can spread your risk across two different digital assets.
CI Galaxy Multi Cryptocurrency ETF (CBCX)
- Assets under management: Ethereum and bitcoin
- Fund value: $3M
- Management fee: 0.5%
- Launch Date: 28 January 2022
This multi crypto ETF holds both bitcoin and Ether. The fund is quite small at just $3M, but it is a top choice for personal investments and is available to purchase in your registered accounts just like other crypto ETFs.
Bitcoin prices go up and down, so it might be worth it to spread your risk and invest in the second-highest valuable crypto in Ethereum as well.
The management fee is lower than some other cryptocurrency ETFs, so it is a good choice for anyone looking to invest in both bitcoin and Ether. You can get it on Wealthsimple.
Purpose Crypto Opportunities ETF
- Assets under management: Ethereum, bitcoin, and equities
- Fund value: $2.9M
- Management fee: 1.25%
- Launch Date: 29 November 2021
This ETF holds 66% cryptocurrencies, 9.5% equities and 17.5% options.
This fund is perfect for investors looking to diversify across the top-two cryptocurrencies as well as technology companies that are involved in blockchain.
Returns are not yet available for this fund. You can get it on Wealthsimple.
Pros Of Buying Crypto ETFs in Canada
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Exposure to cryptocurrency market
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You can buy shares within tax-free and registered accounts
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You can keep all of your investments in one brokerage
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You don’t have to deal with a crypto exchange
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No need for a digital wallet
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No private keys to keep safe
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You don’t have to keep your crypto secure yourself
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Someone else manages the crypto for you
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ETF trades are easy to do
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Crypto kept in cold storage
Cons Of Buying Cryptocurrency ETFs in Canada
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You don’t own the cryptocurrency yourself
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You must trust the brokerage and asset manager
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Currently only bitcoin and Ether ETFs available
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High management fees that can eat into profits
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Volatile digital asset fund
Are there any Blockchain ETFs?
There are multiple publicly traded companies that you can purchase shares in. For example, you could invest in mining companies such as Hive Blockchain Technologies.
There are also plenty of technology companies that believe in and utilize blockchain technology such as Block Inc (SQ).
There are also blockchain ETFs. There is the CI Galaxy Blockchain ETF which tracks the performance of companies involved in blockchain technology and the Purpose Crypto Opportunities fund listed above.
FAQs:
What is the best bitcoin ETF in Canada?
The CI Galaxy Bitcoin ETF (BTCX) because it has the lowest management fee of just 0.4%, but it is also a fairly large fund with over $323M in assets.
What is the best Ether ETF in Canada?
One of the best Ether ETFs in Canada is CI Galaxy Ethereum (ETHX) because of its low management fee of 0.4%. It is also a large fund with over $411M in Ether.
What is the best blockchain ETF in Canada?
The best blockchain ETF in Canada is the CI Galaxy Blockchain ETF. The management fee is relatively low at 0.5%.
Are there Altcoin ETFs?
There are currently no altcoin ETFs available in Canada.
Is there a Dogecoin ETF in Canada?
There is no Dogecoin ETF available.
Is there a Cardano ETF in Canada?
There is no Cardano ETF available.