Key Takeaways
- • 3iQ Digital Asset Management is moving its two Ether products, The Ether Fund and the 3iQ Ether ETF, into staking, with the ETF to be renamed the 3iQ Ether Staking ETF (ETHQ), according to the Wealth Professional report.
- • ETHQ's management fee is waived until March 31, 2024, and the firm will instead collect a 25% 'staking service fee' on staking rewards, which the article says replaces a prior 1.00% fee as reported by The Globe and Mail.
- • Staking is expected to yield between 3% and 5% for Canadian investors, according to chairman and CEO Fred Pye.
- • Pye argues that anticipated U.S. approval of crypto ETFs and the upcoming Bitcoin halving could increase demand and lift crypto values, though these remain his projections.
- • Bitcoin rose back above $45,000 CAD and both Bitcoin and Ether gained over 5% by the morning of October 24, 2023.
Summary
Bitcoin and Ether gained more than 5% by the morning of Tuesday, October 24, 2023, with bitcoin climbing back above $45,000 CAD, according to Wealth Professional. Fred Pye, Chairman and CEO of 3iQ Corp, attributed the move to expectations that U.S. regulators will approve crypto ETFs, arguing that investors are buying ahead of an announcement that would allow most investment advisors worldwide to buy Bitcoin and Ether products.
Pye framed Canada as leading global adoption of investable crypto products and said regulators in both Canada and the U.S. have hired analysts he believes are pro-blockchain. He pointed to Canadian regulatory leadership as the basis for two new 'first' strategies from his firm. Last week, 3iQ Digital Asset Management announced that The Ether Fund and the 3iQ Ether ETF would begin staking. Staking, used by Ether to secure its network, involves holders locking up holdings to validate transactions and receive rewards, in contrast to Bitcoin's mining-based model. Pye said Canadian investors would gain Ether exposure while receiving a yield of 3% to 5%.
To support the rollout, 3iQ has waived the management fee on the 3iQ Ether ETF, to be renamed the 3iQ Ether Staking ETF (ETHQ), until March 31, 2024. The firm will instead take a 25% 'staking service fee' on staking rewards, which will make up its management revenue. According to The Globe and Mail, ETHQ previously charged a 1.00% fee. Pye said the legal and regulatory work needed for OSC approval justified the structure.
Pye argues that a small crypto allocation can improve total return and reduce volatility, and that digital assets are a '15-year story.' He cited the Bitcoin halving and expected U.S. ETF approval as drivers of higher values, and acknowledged that some investors who bought near the 2021 peak remain underwater. He said digital assets show low correlation with traditional markets but high correlation with each other.
Pye framed Canada as leading global adoption of investable crypto products and said regulators in both Canada and the U.S. have hired analysts he believes are pro-blockchain. He pointed to Canadian regulatory leadership as the basis for two new 'first' strategies from his firm. Last week, 3iQ Digital Asset Management announced that The Ether Fund and the 3iQ Ether ETF would begin staking. Staking, used by Ether to secure its network, involves holders locking up holdings to validate transactions and receive rewards, in contrast to Bitcoin's mining-based model. Pye said Canadian investors would gain Ether exposure while receiving a yield of 3% to 5%.
To support the rollout, 3iQ has waived the management fee on the 3iQ Ether ETF, to be renamed the 3iQ Ether Staking ETF (ETHQ), until March 31, 2024. The firm will instead take a 25% 'staking service fee' on staking rewards, which will make up its management revenue. According to The Globe and Mail, ETHQ previously charged a 1.00% fee. Pye said the legal and regulatory work needed for OSC approval justified the structure.
Pye argues that a small crypto allocation can improve total return and reduce volatility, and that digital assets are a '15-year story.' He cited the Bitcoin halving and expected U.S. ETF approval as drivers of higher values, and acknowledged that some investors who bought near the 2021 peak remain underwater. He said digital assets show low correlation with traditional markets but high correlation with each other.
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