Experts reflect on the accomplishments of bitcoin ETFs in Canada
The recent filing for a bitcoin exchange-traded fund (ETF) by BlackRock (BLK) with the US Securities and Exchange Commission sparked renewed interest from institutions, igniting debates over crypto-related financial tools within the United States, as reported by CoinDesk.
However, a glance north to Canada reveals a more nuanced perspective on the impact of spot bitcoin ETFs on the market, where these products obtained approval and have been operating successfully for over two and a half years.
While critics of the "not-your-keys, not-your-crypto" stance argue against the indirect ownership of the underlying asset through an ETF, a broader view suggests that the ETF structure offers benefits beyond the crypto-savvy demographic.
Here are what Purpose Investments’ Gorast Tasevski, product analyst and Haan Palcu-Chang, crypto specialist found as key takeaways from Canada's experience.
Security
Despite concerns among some crypto investors about relinquishing control of their coins, stringent regulatory oversight in Canada has compelled fund providers to prioritize transparency and adhere to a rigorous operational framework.
This approach minimizes the likelihood of asset mingling, hacks, and fraud. Investors in Canadian spot bitcoin ETFs have remained immune to asset hacks and losses stemming from misconduct or poor financial management – a contrast to the experiences of investors who entrusted assets with platforms like FTX, Celsius Network, and BlockFi.
Accurate alternative to direct exposure
While the US SEC raised apprehensions about the potential risks of spot bitcoin ETFs, it concurrently authorized bitcoin futures ETFs and direct digital asset trading on exchanges.
Canada, however, demonstrated that spot ETFs closely emulate direct bitcoin exposure without the added uncertainties of the futures market and the complexities of unregulated exchanges.
Accessibility
To the experts, the significance of accessibility in mainstream asset adoption cannot be overstated.
A Bank of Canada study in 2021 underscored the correlation between the rise in bitcoin investments and user-friendly mobile exchanges. The substantial capital influx into Canada's top three bitcoin ETFs indicates that the ease of access associated with a bitcoin-backed financial asset seamlessly integrated into the traditional financial system resonates strongly with investors.
