World’s First Bitcoin ETF Added $3M Daily During Price Dip
Canada’s first Bitcoin exchange-traded fund (ETF), TSX Purpose BTC, which is the world’s first BTC ETF, added $3 million daily to its assets during the recent Bitcoin price dip. According to reports, when the Purpose BTC ETF started trading, within the first hour, it recorded $80 million in volume. The price of Bitcoin had moved from its all time high of $64,493 to $30,000. It had moved further below the $30k price range to $28k. However, this did not stop investors from investing in the Purpose BTC ETF.
Canada’s Securities and Exchange Commission (SEC) had approved the Purpose BTC ETF in mid-February, which paved the way for other BTC ETFs in the country. Currently, there are three crypto (Bitcoin) ETFs that have been approved by the SEC in the North American country. Although many others have been rejected as their applications were not convincing enough. Evolve Group was the second to get its BTC ETF approved by the Canada SEC. So far, the reception for crypto ETFs around the world is positive. However, the US SEC has repeatedly rejected calls and applications for crypto ETFs.
Over 20,000 BTC Held By Purpose BTC ETF
According to the data released by crypto data provider, Glassnode, assets under management in the Purpose BTC ETF continued increasing throughout the middle till the end of May. Despite the price lull in the market, investors under the ETF have refused to sell off their holdings. The data indicated that the Purpose BTC ETF is in custody of over 20,000 BTC estimated to be $720 million.
Purpose Bitcoin ETF Chart; Source: Glassnode
Crypto exchange-traded funds allow investors to buy crypto assets represented as shares of a company. Over the past years, following the soaring popularity of cryptocurrencies, investors have expressed concerns over their volatile nature and how difficult it is to store these assets, especially with digital wallets which you are required to use private keys in gaining access to. Thus, ETFs are a hedge against these inherent risks. So instead of buying cryptos and owning them directly, investors can buy a company’s shares representing cryptocurrency. BTC ETFs are currently the most common.
South America First BTC ETF Listed on Brazilian Stock Exchange
Interestingly, South America recently got its first BTC ETF after Brazil’s SEC (CVM) approved an ETF application submitted by QR Capital. The BTC ETF (QBTC11) was further listed on the Brazilian Stock Exchange. Alongside Canada’s three BTC ETFs, there are only four BTC ETFs around the globe with high expectations that the number would increase. In fact, investors in the US are optimistic that the US SEC would approve a crypto ETF.
The US SEC has fronted concerns over manipulation as the reason for its laid-back attitude on crypto ETFs. The US stock market is bigger than Canada’s, which experts believe would cause an uptick in the crypto market if an ETF is approved in the US. Financial experts consider crypto ETFs as a meeting point between the crypto market and the traditional financial market.
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