Bitcoin ETF: Canadians invest $150 million in one month

Canadians are investing a record amount of money in Bitcoin ETFs. The latest data shows that in February this year, the scale of inflows into Canadian ETFs reached $5.2 billion, a record for a single month. Global stock markets also performed strongly in February, with the S&P 500 index rising 3.39%, which may explain the flow of funds from Canadian funds. In addition, among all Canadian funds, the scale of inflows into Bitcoin ETFs ranks second, indicating that Bitcoin, which continues to hit new highs, is increasingly sought after by the market.

Bitcoin ETFs provide investors with a more convenient and secure way to invest in the world's largest cryptocurrency.

Bitcoin ETF: Ranked 2nd among Canadian Funds in terms of Inflows

In February, the two Canadian funds with the largest inflows were:

• TD Global Technology Leaders ETF, $950 million in inflows

• Purpose Bitcoin ETF (TSX: BTCC.B), $150 million in inflows

The two funds’ high rankings are expected, after all, technology and Bitcoin are two major trends in the current market. Toronto-Dominion Bank’s fund is a high-growth technology ETF similar to Cathie Wood’s well-known fund, while the Purpose Bitcoin ETF benefits from the bull market in cryptocurrencies. Toronto-Dominion Bank’s Global Technology Leaders Fund is a fairly standard technology fund, while the Purpose Bitcoin ETF is much more alternative.

What exactly does this Bitcoin ETF invest in?

Purpose Bitcoin ETF is a fund, so you might think that the ETF's holdings should be quite diversified. Generally speaking, fund managers will diversify their investments, and there are many types of cryptocurrencies to invest in, so Purpose's portfolio should include a variety of different cryptocurrencies. However, the holdings report shows that the fund seems to hold all Bitcoin, with no other cryptocurrencies, no cryptocurrency stocks, and no derivatives. As of March 19, the fund held a total of 14,195 Bitcoins and an asset management scale (AUM) of approximately $1 billion.

What is the value proposition of this Bitcoin ETF?

On the surface, Purpose Bitcoin ETF seems to lack a clear value proposition. How is holding Bitcoin in full different from holding Bitcoin directly by investors? In fact, since the fund also charges various fees, the yield of BTCC is not as good as that of Bitcoin. However, BTCC can provide investors with an important value: security.

If you hold Bitcoin in a wallet, you are responsible for the security of the wallet and remember the password. If someone hacks your wallet or you forget the password, it will be bad. Virtual currency service platforms like Coinbase claim to have bought "account insurance", but this insurance only covers their data centers, and holders are not covered by their network attacks or forgetting passwords.