First Ever Bitcoin Mutual Fund in Canada

Many experts from the crypto industry today are hoping for a Bitcoin ETF. Many believe that this could make it easier for institutional investors to throw their capital into the crypto market. And potentially, this could lead to another bull run similar to what happened last year. Unfortunately, things aren’t as smooth as expected.

There have been a number of Bitcoin ETF applications that have already been denied by the US Securities and Exchange Commission (SEC) including that of Cameron and Tyler Winklevoss. Other Bitcoin ETF applications have also been denied after the Winklevoss Bitcoin ETF application. The reason seemed template as to why the agency chose to reject the Bitcoin ETF applications—price manipulation.

A Bitcoin Mutual Fund?

Farther north of the US border, First Block Capital Inc reported that it now has the very first and only regulated Bitcoin mutual fund. The FBC Bitcoin Trust has now achieved mutual fund trust status which allows the holders to buy units in their registered account via RRSP or TFSA. It is also available via NEO Connect.

According to Sean Clark who is the co-founder and CEO of First Block, “Since inception, First Block Capital has been committed to providing investors with regulated titled and auditable exposure to investment vehicles based on blockchain and cryptocurrency”. He also added that “Our team is extremely proud to maintain our market leading position and will continue to execute our vision of creating a fleet of investible products dedicated to the space”.

This could actually be good news. It can become a precedent and could pave the way towards having a Bitcoin ETF. The FBC Bitcoin Trust allows accredited investors to buy and sell the same way that they do in ETFs. Marc van der Chijs who is the co-founder and Chief Investment Officer of First Block mentioned that “With this accomplishment, we continue to push Canada forward as a leader in regulated blockchain and cryptocurrency investment vehicles” He also added that “Our goal is to make digital currency asset class more accessible and we are one step closer to achieving this goal by allowing unitholders to place units in government-sponsored tax efficient vehicles, and by providing daily liquidity through NEO Connect, a fund distribution platform with a rapidly growing dealer network”.

For Sean Clark, it is also important that they have removed the previous 30-day redemption clause and enabled daily settlements. He mentioned in an interview that he believes that it was the longer redemption time that turned off a number of investors. He said that “Investors wanted more liquidity in this sector and we are pleased to now be able to offer advisers daily trading capabilities for those discretionary accounts”.

Is This a Good Thing?

Can this be a good thing? Andreas Antonopoulos thinks that a Bitcoin ETF and traditional instruments don’t mix well. The main reason for this is that you “take a reserve of bitcoins and then make them tradable instrument that can be traded on traditional market like stocks. This is a custodial reserve system, where the custodian holds the actual bitcoin and what you’re getting is a share in their fund—not bitcoin”.