9 Best Crypto ETFs in Canada for 2021

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by Enoch Omololu

Updated

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Cryptocurrency ETFs package crypto assets into a format that is easily accessible by investors who are more comfortable with mainstream investment assets.

When you buy Bitcoin ETFs or Ethereum ETFs for instance, you gain exposure to the underlying cryptocurrency (BTC or ETH) without having to worry about the intricacies of cold wallets or all the other custodial technicalities that come with buying and holding these coins directly.

The first crypto ETFs in North America were launched in Canada and are traded on the Toronto Stock Exchange.

While there are several crypto ETFs vying for approval in the United States, U.S. regulators are still on the fence about the risks they pose to investors.

In this article, I cover the nine best cryptocurrency ETFs you can own in Canada.

What are Crypto ETFs?

So far, there are three broad types of crypto ETFs in Canada – Bitcoin, Ethereum, and Bitcoin+Ether ETFs.

These Exchange Traded Funds invest directly in the actual crypto and hold them in cold storage.

Essentially, when you purchase a crypto ETF, you are buying the digital asset and the value of your holdings will vary based on the performance of the underlying cryptocurrency.

Crypto ETFs are not the same as blockchain ETFs which are ETFs with holdings in companies that develop or use blockchain technologies.

Like other ETFs, you can purchase a crypto ETF using a brokerage account.

Canadian Crypto ETFs

Crypto ETFs are designed for investors who want exposure to cryptocurrency in their search for long-term capital growth.

These funds are best suited for individuals with higher-than-average risk tolerance.

Best Bitcoin ETFs in Canada

The four Canadian Bitcoin ETFs are offered by:

  1. Purpose Investments: Purpose Bitcoin ETF (BTCC)
  2. Evolve Funds Group Inc: Evolve Bitcoin ETF (EBIT)
  3. CI Global Asset Management: CI Galaxy Bitcoin ETF (BTCX)
  4. 3iQ Corp: 3iQ CoinShares Bitcoin ETF (BTCQ)

1. Purpose Bitcoin ETF

The Purpose Bitcoin ETF (BTCC) was the world’s first bitcoin ETF. It is available in Canadian and U.S. dollars, and also has a version that is hedged against foreign currency fluctuations.

Key facts for BTCC as of August 6, 2021, are:

  • Ticker: BTCC, BTCC.B, BTCC.U
  • Inception date: February 11, 2021
  • Assets under management (AUM): $1.2 billion
  • Management fee: 1.00%
  • Listing currency: CAD and USD

Purpose Investments buys bitcoin for the fund and keeps 100% of its holdings in cold storage.

BTCC can be purchased in both registered and non-registered investment accounts.

The current management fee is 1.00% and the Management Expense Ratio (MER) is capped at 1.50%.

Performance-wise, the returns for BTCC won’t be available until one year after its inception.

BTCC and other crypto ETFs have a “high” risk rating as they are fully invested in a single digital asset and offer no diversification across cryptocurrencies in general.

You can buy BTCC (and the other ETFs) using a no-commission brokerage account like Wealthsimple Trade ($50 bonus) and Questrade ($50 in free trades).

2. CI Galaxy Bitcoin ETF

The CI Galaxy Bitcoin ETF (BTCX) provides exposure to bitcoin and has the lowest management fee of the four bitcoin ETFs in Canada (0.4%).

Key facts for BTCX as of August 6, 2021, include:

  • Ticker: BTCX.B; BTCX.U
  • Inception: March 5, 2021
  • AUM: $298.9 million
  • Management fee: 0.40%
  • Listing currency CAD and USD

This fund can be bought in a taxable account as well as registered investment accounts like the RRSP and TFSA.

As per their website, the MER for BTCX will not exceed 0.95%.

Like the others, performance numbers won’t be available until March 2022.

3. Evolve Bitcoin ETF

Evolve Bitcoin ETF (EBIT) is available in CAD and USD. It uses the CME CF Bitcoin Reference Rate for the benchmark index.

Fund details for EBIT as of August 6, 2021, are:

  • Ticker: EBIT; EBIT.U
  • Inception: February 17, 2021
  • AUM: $87.89 million
  • Management fee: 0.75%
  • Listing currency: CAD and USD

EBIT’s management fee is 25 basis points lower than BTCC’s at 0.75%.

Also, data on its performance and returns won’t be available until after the first year.

4. 3iQ CoinShares Bitcoin ETF

The 3iQ CoinShares Bitcoin ETF (BTCQ) is offered by 3iQ Corp in partnership with CoinShares.

It is also listed in Canadian and U.S. dollars.

Some key details for this ETF as of August 6, 2021, are:

  • Ticker: BTCQ; BTCQ.U
  • Inception: March 31, 2021
  • AUM: $1.075 billion
  • Management fee: 1%
  • Listing currency: CAD and USD

The MER for BTCQ is capped at 1.25%, and this fund is also eligible for registered and non-registered accounts.

Best Ethereum ETFs in Canada

The four investment firms listed above also offer Ether ETFs as follows:

1. Purpose Ether ETF

You can own Ether and benefit from its growth (assuming it does well over time) by purchasing the Purpose Ether ETF (ETHH).

Its details as of August 6, 2021, include:

  • Ticker: ETHH; ETHH.B; ETHH.U
  • Inception: April 16, 2021
  • AUM: $231.5 million
  • Management fee: 1.00%
  • Listing currency: CAD and USD

The MER for ETHH is capped at 1.50%.

All the Ether ETFs in Canada are 100% invested in Ether and the crypto is held in cold storage.

2. CI Galaxy Ethereum

Similar to its bitcoin ETF offering, the CI Galaxy Ethereum has the lowest management fee at 0.40%. Its MER is also not expected to surpass 0.95%.

ETHX.B details as of August 6, 2021, include:

  • Ticker: ETHX.B; ETHX.U
  • Inception: April 16, 2021
  • AUM: $573.98 million
  • Management fee: 0.40%
  • Listing currency: CAD and USD

3. Evolve Ether ETF

The Evolve Ether ETF (ETHR) was the CME CF Ether-Dollar Reference Rate benchmark index and is available in Canadian and U.S. dollars on the TSX.

It can also be traded using options on the Montréal Exchange:

ETHR details include:

  • Ticker: ETHR; ETHR.U
  • Inception: April 19, 2021
  • AUM: $59.52 million
  • Management fee: 0.75%
  • Listing currency: CAD and USD

4. 3iQ CoinShares Ether ETF

The 3iQ CoinShares Ether ETF is the fourth Ether ETF approved in 2021.

It is listed on the TSX in both Canadian and U.S dollars and has a management fee of 1.00% like Purpose’s ETHH.

Key fund details for ETHQ as of August 6, 2021, include:

  • Ticker: ETHQ; ETHQ.U
  • Inception: April 19, 2021
  • AUM: $309.48 million
  • Management fee: 1.00%
  • Listing currency: CAD and USD

Bitcoin and Ethereum ETFs

A combined Bitcoin and Ether ETF (ETC) was recently launched in Canada:

Evolve Cryptocurrencies ETF

Evolve’s Cryptocurrencies ETF is Canada’s first multi-cryptocurrency ETF. Key facts for this fund as of September 30, 2021, are:

  • Ticker: ETC
  • Inception date: September 29, 2021
  • AUM: $2.291 million
  • Management fee: 0% (0.75% for underlying ETFs)
  • Listing currency: USD and CAD

ETC aims to expose investors to the cryptocurrency markets by holding Bitcoin via EBIT (68.06%) and Ether via ETHR (31.89%).

Although ETC does not have a management fee, the MER charged by its constituent ETFs applies each year (0.75%).

The returns data for ETC won’t be available until after one calendar year.

How To Buy Crypto ETFs in Canada

You can purchase crypto ETFs on most Canadian brokerage platforms that offer stock and ETF trading.

Our top choices are Wealthsimple Trade and Questrade.

Wealthsimple Trade: Offers thousands of stocks and ETFs and you don’t pay trading commissions. When you open a new account and trade at least $150 worth of assets, you get a $50 cash bonus.

Learn more in this review of Wealthsimple Trade.

Questrade: Crypto ETF purchases are free on Questrade. When you sell, you pay a low transaction fee.

This platform has more than $25 billion in assets. New clients who deposit at least $1,000 get $50 in free trade credits.  Get more details in this review.

Pros of Crypto ETFs

The cryptocurrency world is still shrouded in some mystery and it can be challenging for non-crypto enthusiasts to “separate the wheat from the chaff”.

What crypto ETFs do is that they add legitimacy to the most popular digital assets- Bitcoin and ETF by making them available via regulated channels.

Like traditional stocks and ETFs, you can purchase crypto ETFs on an exchange using brokerage platforms that are regulated by CIPF and IIROC.

If these brokerages were to become bankrupt, your funds are insured up to $1 million.

Crypto ETFs also remove the need to take custody of the coins yourself.

You don’t need to buy a cryptocurrency cold wallet like Ledger Nano X or Trezor, or worry about losing your private keys.

The cryptocurrency industry is in its nascent stages. If government regulation does not kill it and blockchain technology and Decentralized Finance (DeFi) takes off, your investments could generate outstanding returns.

If you end up making money while holding your crypto ETF in a tax-sheltered account (e.g. TFSA), these returns are tax-free or tax-deferred if held in an RRSP.

Crypto can provide added diversification to your investment portfolio.

Cons of Crypto ETFs

Crypto assets experience significant price volatility and are not suitable for investors with a low appetite for risk.

Price drops of up to 50% within weeks are par for the course for these assets.

The management fees charged by these funds eat into your returns. For example, BTCC will charge up to a 1.50% Management Expense Ratio. This is equivalent to $15 in fees per $1,000 investment per year.

If you are comfortable buying cryptocurrency directly, you can do so using one of the best cryptocurrency trading apps in Canada.

Note that direct crypto purchases also incur fees and have some downsides.

If you decide at a later date that you’d rather own the physical cryptocurrency and not the ETF, you can’t switch them 1:1 without first selling the ETF and triggering a taxable event.

Blockchain Stocks and ETFs

Blockchain ETFs provide exposure to stocks of companies that create, support, or use blockchain technologies.

The top 5 blockchain ETFs are:

  • Amplify Transformational Data Sharing ETF (BLOK)
  • Siren Nasdaq NexGen Economy ETF (BLCN)
  • First Trust Index Innovative Transaction & Process ETF (LEGR)
  • VanEck Vectors Digital Transformation ETF (DAPP)
  • Capital Link NextGen Protocol ETF (KOIN)

Best Canadian Crypto ETF FAQs

What is the best bitcoin ETF in Canada?

Based on low management fees, the best bitcoin ETF in Canada is the CI Galaxy Bitcoin ETF (BTCX).

What is the best Ethereum ETF in Canada?

The best Ether ETF in Canada is the CI Galaxy Ethereum ETF. It has the lowest management fee at 0.40%.

How many crypto ETFs are in Canada?

There are 9 Canadian cryptocurrency ETFs as of this writing.

Is there a Dogecoin ETF in Canada?

No. There is no Dogecoin ETF with primary investment in the Dogecoin token.

Does Vanguard have a cryptocurrency ETF?

No, there is no Vanguard Cryptocurrency ETF. That said, Fidelity Investments is one of the firms seeking approval from the SEC to launch a Bitcoin ETF in the U.S.

Related: Best Cold Wallets in Canada.

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Author

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Enoch Omololu

Enoch Omololu is a personal finance expert and a veterinarian. He has a master’s degree in Finance and Investment Management from the University of Aberdeen Business School (Scotland) and has completed several courses and certificates in finance, including the Canadian Securities Course. He also has an MSc. in Agricultural Economics from the University of Manitoba and a Doctor of Veterinary Medicine degree from the University of Ibadan. Enoch has a passion for helping others win with their personal finances and has been writing about money matters for over a decade. His writing has been featured or quoted in The Globe and Mail, Winnipeg Free Press, Wealthsimple, Financial Post, Toronto Star, Credit Canada, MSN Money, National Post, CIBC, and many other personal finance publications.

His top investment tools include Wealthsimple and Questrade. He earns cash back on purchases using KOHO, monitors his credit score for free using Borrowell, and earns interest on savings through EQ Bank.

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