Key Takeaways
- • Evolve Funds Group launched the Bitcoin ETF (TSX: EBIT) on February 19, 2021, after closing its initial offering of units, making it one of the first physically backed bitcoin ETFs in Canada.
- • EBIT holds physical bitcoin in cold storage, with Gemini Trust Company, LLC serving as sub-custodian, and will not use derivatives or futures contracts.
- • The fund's daily NAV is based on the CME CF Bitcoin Reference Rate, a once-daily USD benchmark administered by CF Benchmarks.
- • EBIT is offered in Canadian dollar unhedged units (EBIT) and U.S. dollar unhedged units (EBIT.U), and is eligible for RRSP and TFSA accounts through brokerage platforms.
- • Evolve, with over $1.7 billion in AUM, positions the product as a thematic ETF addition to its lineup, citing bitcoin's uncorrelated store-of-value profile.
Summary
Evolve Funds Group Inc. announced on February 19, 2021 that its Bitcoin ETF, ticker EBIT, began trading on the Toronto Stock Exchange that day after the fund closed its initial offering of units, according to a company press release distributed via PR Newswire Canada. Evolve described the product as one of the first true bitcoin ETFs in Canada.
EBIT seeks to provide exposure to the daily U.S. dollar price movements of bitcoin using the creation and redemption mechanics of the ETF structure. Investors will directly own bitcoin on the Bitcoin blockchain, held in a cold wallet. Gemini Trust Company, LLC will act as sub-custodian for the fund's bitcoin holdings. David Abner, Head of Business Development at Gemini, said the firm's custody, execution and clearing services provide investors with comfort in a market that presents unique challenges for fund issuers.
The fund will not seek exposure through derivatives or futures contracts. Its daily net asset value will be calculated using the CME CF Bitcoin Reference Rate, a once-daily benchmark denominated in U.S. dollars. Elliot Johnson, Chief Investment Officer and Chief Operating Officer at Evolve ETFs, said the benchmark is administered by CF Benchmarks, which he described as the world's first regulated crypto benchmark administrator, and draws real-time data from five bitcoin exchanges: Gemini, itBit, Coinbase, Kraken and Bitstamp.
EBIT is available in Canadian dollar unhedged units (TSX: EBIT) and U.S. dollar unhedged units (TSX: EBIT.U). Raj Lala, Evolve's President and CEO, said the product allows investors to access bitcoin through brokerage accounts within registered plans including RRSPs and TFSAs, and characterized bitcoin as a store of value uncorrelated with other major asset classes that has now emerged as an asset class in its own right.
Evolve, which reports more than $1.7 billion in assets under management, launched its first ETF in September 2017 and specializes in thematic and disruptive innovation products. The release notes that ETFs carry risks and that investors should review the prospectus before investing.
EBIT seeks to provide exposure to the daily U.S. dollar price movements of bitcoin using the creation and redemption mechanics of the ETF structure. Investors will directly own bitcoin on the Bitcoin blockchain, held in a cold wallet. Gemini Trust Company, LLC will act as sub-custodian for the fund's bitcoin holdings. David Abner, Head of Business Development at Gemini, said the firm's custody, execution and clearing services provide investors with comfort in a market that presents unique challenges for fund issuers.
The fund will not seek exposure through derivatives or futures contracts. Its daily net asset value will be calculated using the CME CF Bitcoin Reference Rate, a once-daily benchmark denominated in U.S. dollars. Elliot Johnson, Chief Investment Officer and Chief Operating Officer at Evolve ETFs, said the benchmark is administered by CF Benchmarks, which he described as the world's first regulated crypto benchmark administrator, and draws real-time data from five bitcoin exchanges: Gemini, itBit, Coinbase, Kraken and Bitstamp.
EBIT is available in Canadian dollar unhedged units (TSX: EBIT) and U.S. dollar unhedged units (TSX: EBIT.U). Raj Lala, Evolve's President and CEO, said the product allows investors to access bitcoin through brokerage accounts within registered plans including RRSPs and TFSAs, and characterized bitcoin as a store of value uncorrelated with other major asset classes that has now emerged as an asset class in its own right.
Evolve, which reports more than $1.7 billion in assets under management, launched its first ETF in September 2017 and specializes in thematic and disruptive innovation products. The release notes that ETFs carry risks and that investors should review the prospectus before investing.
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