The wait is over. An exchange-traded Bitcoin fund on a major global stock exchange is now a reality, but not in the United States. This singular honor went to the Toronto Stock Exchange (TSX) in Canada and to 3iQ, the asset management firm that stayed the course for three years and which launched the fund this past Thursday. $14 million was invested on that eventful day with more to come as this storyline rolls out. Sadly, the Securities and Exchange Commission (SEC) in the U.S. continues to place roadblocks in the way of a similar product launching down south, but for now, TSX is the winner.
The fund acts much in the same way as traditional exchange-traded products on national exchanges. Public investors can now buy and sell shares of a BTC regulated fund on the exchange without having to worry about custodial issues, remembering special crypto passwords, dealing with the risk of a security breach and impending account compromise, or taking possession of the physical asset. In its prospectus, Canadian asset manager 3iQ appropriately dubbed their new product as “The Bitcoin Fund”, which was designed to add “exposure to the digital currency bitcoin and the daily price movements of the U.S. dollar price of bitcoin”.
3iQ is no stranger to the crypto space. Back in February, it teamed up with Mavennet to enter the stablecoin arena by launching “QCAD”, a coin that will be pegged to the Canadian Dollar, subject to regulation by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). As for index pricing issues with the Bitcoin Fund, the new product entry is partnering with crypto data company CryptoCompare and VanEck Europe subsidiary MV Index Solutions. Class A shares trade under the QBTC.U symbol for all investors, while Class F shares reserved for institutions will trade later.
The Winklevoss brothers, who have been stymied by the SEC on several occasions in the U.S. market with their various BTC ETF applications, will also act as the custodian for the new fund. Tyler Winklevoss expressed his words of support to Coinfomania:
The Bitcoin Fund just launched on the Toronto Stock Exchange. This is the first public bitcoin fund listed on a major global stock exchange. Proud that @Gemini was selected as the custodian for this fund. Congrats to @3iq_corp for making history!
In the meantime, the SEC continues to block similar efforts in the U.S. market. In the latter part of February, the regulator rejected the final BTC ETF application on its table, this one submitted by New York-based Wilshire Phoenix with support from NYSE Arca. Per accounts from CoinDesk, the commission restated previous concerns in that it found that the proposed fund failed “to prevent fraudulent and manipulative acts and practices” and “to protect investors and the public interest”.
SEC Commissioner Hester Peirce, affectionately known as “crypto mom” for her favorable comments in the past, delivered a blistering dissent:
This line of disapprovals leads me to conclude that this Commission is unwilling to approve the listing of any product that would provide access to the market for bitcoin and that no filing will meet the ever-shifting standards that this Commission insists on applying to bitcoin-related products—and only to bitcoin-related products.
North America, however, will be served, at least by TSX and 3iQ in Canada. 3iQ president and CEO Fred Pye did express a bit of apprehension to CoinDesk about the timing of his firm’s launch, coincident with the world reacting to the COV-19 pandemic:
It’s tough to launch such a unique offering during a period where investors are worried about their health and protection of capital. However, long-term protection of purchasing power is what bitcoin is all about.