Evolve Becomes Second Canadian Issuer to Win Approval for Bitcoin ETF

The Ontario Securities Commission (OSC) has approved Canada’s second bitcoin exchange-traded fund (ETF). 

Evolve’s bitcoin ETF was conditionally approved on Tuesday to trade on the Toronto Stock Exchange, the company announced in a press release. 

“Evolve was the first to file for a bitcoin ETF in the U.S.,” said James Seyffart, ETF research analyst at Bloomberg Intelligence. “It’s a promising sign if there are no issues with launching a bitcoin ETF in Canada. … The U.S. regulatory framework tends to be a lot more in line with things that happen in Canada.”

ETFs are an easy way for investors who want to get exposure to bitcoin without having to hold the asset itself and without having to deal with the premiums at which bitcoin funds like Grayscale Bitcoin Trust normally trade. 

Evolve has tapped CF Benchmarks as the fund’s index provider, EY as its auditor, Cidel Trust Company as its custodian, Gemini Trust Company as its sub-custodian and CIBC Mellon Global Securities Services as its fund administrator. 



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A Second Bitcoin ETF Gets Approved in Canada

In brief

  • Canadian regulators have approved a Bitcoin ETF application filed by Evolve Funds Group.
  • The fund, dubbed EBIT, will offer institutional investors an alternative way to access Bitcoin.
  • This is already a second Bitcoin ETF approved in Canada.

The Ontario Securities Commission (OSC) has approved the application for a Bitcoin exchange-traded fund (ETF) filed by Evolve Funds Group, according to an announcement today.

“The cryptocurrency market becomes more integrated with the traditional financial markets by the day. Evolve has developed a true first—giving investors an easy-to-understand product that is available through their existing brokers and advisors that gives ownership of Bitcoin,” Sui Chung, CEO of crypto indices platform CF Benchmarks—which the ETF will be using—told Decrypt.

Exchange-traded funds are a type of security that comprise various baskets of assets, shares of which can be listed and traded on exchanges. In the case of a Bitcoin ETF, the underlying asset is the cryptocurrency. This way, crypto ETFs allow institutional investors to get exposure to digital assets without actually buying or holding them.

Bitcoin is the market leader in crypto. Image: Shutterstock

An ETF usually tracks or follows the price of an asset or a bulk of them traded as a single traditional instrument. Since ETFs can be freely traded on traditional stock markets, their holders can indirectly invest in Bitcoin or other cryptocurrencies.

“Historically it has been difficult to gain exposure to Bitcoin. EBIT aims to provide Canadian investors with a simple and effective way to access the price of Bitcoin. Typically viewed as a non-correlated asset, Bitcoin is gathering institutional interest and being viewed as an alternative to traditional investments such as gold and a potential hedge against inflation,” said Raj Lala, president and CEO of Evolve ETFs.

EBIT will directly hold Bitcoin in its cold wallets and conduct daily valuations of BTC based on CF Benchmarks’s Bitcoin Reference Rate. Currently, the company has no plans for Bitcoin derivatives or futures contracts.

“Now that the OSC has said that if a product is well constructed enough, the crypto market is sufficiently mature for these types of financial products, the industry’s attention inevitably turns south of the border to the US. Will the SEC finally decide that the time is right for a Bitcoin ETF?” Chung added.

As Decrypt reported, the US Securities and Exchange Commission has been turning down all crypto ETF proposals over the last couple of years. In Canada, on the other hand, securities regulators recently approved the first Bitcoin ETF. And now it’s two for two.


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Evolve wins second Canadian Bitcoin ETF as Ontario regulator approves application

North America’s second Bitcoin (BTC) exchange-traded fund received regulatory approval on Tuesday, offering another potential entry point for institutional investors to access digital assets.

Less than three weeks after filing a preliminary prospectus for a Bitcoin ETF, Evolve Funds Group Inc announced Tuesday that its fund has been approved by the Ontario Securities Commission, or OSC.

The ETF has two ticker symbols: EBIT for Canadian-denominated units and EBIT.U for U.S.-denominated units. EBIT is said to provide “unhedged exposure to the daily price movement” of Bitcoin in Canadian dollars, whereas EBIT.U provides exposure to the daily price movements in U.S. dollars. 

Notably, the fund will track price data using CF Benchmarks’ Bitcoin Reference Rate, which aggregates data from several BTC/USD markets into a one-a-day benchmark index.

An updated prospectus submitted to the OSC on Frida outlines the fund’s investment objective:

“The Evolve Fund’s investment objective is to provide holders of Units with exposure to the daily price movements of the U.S. dollar price of bitcoin while experiencing minimal tracking error by utilizing the benefits of the creation and redemption processes.”

To achieve this goal, the Evolve fund will invest in long-term holdings of BTC purchased through Gemini NuSTAR LLC and other platforms. 

The prospectus was filed under a passport system, which allows the fund to be accessed in all of Canada’s 10 provinces and three territories. 

Sui Chung, CEO of CF Benchmarks, told Cointelegraph that the Evolve ETF has “developed a true first — giving investors an easy-to-understand product that is available through their existing brokers and advisors that gives ownership of Bitcoin.”

Chung continued:

“By using the regulated Bitcoin Reference Rate from CF Benchmarks, the ETF tracks the value of the Bitcoin and because its structure allows daily creation and redemption of ETF shares investors aren’t forced to pay soaring premiums in the secondary market.”

The Evolve fund is the second Bitcoin ETF to be approved by Canadian securities regulators this month. The Purpose Bitcoin ETF received approval last week, becoming the first physically settled North American ETF.

An ETF-style product from 3iQ was approved in Canada last year and is currently listed on the Toronto Stock Exchange. However, unlike the Evolve ETF, the EiQ fund doesn’t continually issue new shares.