TL;DR Breakdown:
- An investment fund manager has applied for a new Bitcoin ETF in Canada.
- The product will be listed on TSX if approved by the regulator and the exchange.
A recent document revealed that Arxnovum Investments Inc has applied for a new Bitcoin exchange-traded fund or ETF with the Canadian authorities. Arxnovum is a registered portfolio manager and investment fund manager in Canada. When launched, the product will enable investors in the country to gain additional exposure to the leading cryptocurrency. The prospectus for the new Bitcoin ETF also named Gemini as the sub-custodian of the assets from the product.
Canada to welcome new Bitcoin ETF
In the document, the product ETF was dubbed “Arxnovum Bitcoin ETF.” Filed on Monday, the Bitcoin product is currently pending approval by the country’s Ontario Securities Commission. If the regulator approves it, the investment fund manager will proceed to file with the Toronto Stock Exchange (TSX) for listing under the ticker “BIT.U.” However, Arxnovum is certain whether the product will meet its investment objective, as Bitcoin ETFs come with considerable risk.
“Given the speculative nature of bitcoin and the volatility of the bitcoin market, there is considerable risk that the Bitcoin ETF will not be able to meet its investment objective. An investment in the Bitcoin ETF is not intended as a complete investment program and is appropriate only for investors who have the capacity to absorb a loss of some or all of their investment,” the company said.
Gemini will back the ETF
Meanwhile, the product’s approval by the regulator and TSX will open more doors to gaining exposure in Bitcoin. As noted in the document, the proposed ETF will either invest in the cryptocurrency directly or indirectly through derivative instruments like Bitcoin futures. At some point, the product might also hold cash equivalents and other forms of fixed-income securities.
Leading United States cryptocurrency exchange and custodian, Gemini, will back the product, according to the document. Arxnovum named the exchange as a sub-custodian, meaning that Gemini, as a qualified trust company, will custody the assets from the Bitcoin ETF, which are held outside Canada.
