Canada's First Bitcoin ETF: History and First Approvals
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Compare the long-term costs of investing in Canada's two leading Bitcoin ETFs: Purpose (BTCC) at 0.99% expense ratio and Evolve (EBIT) at 0.75%.
In February 2021 Canada shattered a global ceiling - it launched the world’s first spot Bitcoin exchange‑traded fund, giving everyday investors a regulated way to own the digital gold without ever holding a private wallet. If you’ve ever wondered how that happened, why it mattered, and what came after, this deep dive walks you through every twist and turn.
Why the Purpose Bitcoin ETF mattered
When the Ontario Securities Commission (Ontario Securities Commission) gave the green light on 18 February 2021, it wasn’t just another product launch - it was a signal that traditional finance could finally tame the wild world of crypto. The fund, called the Purpose Bitcoin ETF, started trading on the Toronto Stock Exchange under the tickers TSX:BTCC.B (CAD‑hedged) and TSX:BTCC.U (USD‑hedged). This made Canada the first jurisdiction to offer a true, physically‑backed Bitcoin ETF, a milestone that still reverberates across the globe.
How the ETF works - direct custody, not derivatives
Most crypto products on the market use futures contracts or other derivatives, which can drift far from the underlying asset’s price. The Purpose Bitcoin ETF does things differently: every share you buy triggers the fund to acquire actual Bitcoin, stored in cold‑wallets managed by a qualified custodian. In plain English, you get exposure to Bitcoin’s price movements without needing a personal wallet, seed phrase, or exchange account.
Because it’s a spot‑based ETF, the fund can be held inside tax‑advantaged accounts like a Tax‑Free Savings Account (TFSA) or a Registered Retirement Savings Plan (RRSP). Those accounts have long‑standing rules in Canada, meaning you can earn Bitcoin returns tax‑free or tax‑deferred - a huge benefit for retail investors looking to add crypto to their retirement plans.
Market reaction: a frenzy of dollars and shares
Within the first two trading days, the Purpose Bitcoin ETF swapped roughly C$400 million worth of shares. By the end of its first month, assets under management (AUM) topped the C$1 billion mark, making it one of the fastest‑growing ETFs ever launched in Canada. In its inaugural week, daily trading volumes neared C$1 billion, and premiums over net asset value (NAV) were barely 0.2% - a testament to the ETF’s efficient creation/redemption mechanism.
Fast forward to February 2024, the fund still held more than C$2 billion in AUM, cementing its status as a benchmark for spot‑based crypto funds worldwide.
Follow‑up launches: Evolve and the ripple effect
Just 24 hours after Purpose’s debut, the Evolve Bitcoin ETF hit the market (ticker: EBIT). The twin launches highlighted pent‑up demand and demonstrated that the regulatory pathway was clear. In the months that followed, other providers entered the space, but Purpose and Evolve remain the most liquid and widely followed.
These Canadian products also forced regulators in the United States to rethink their stance. The U.S. SEC didn’t approve a Bitcoin ETF until October 2021, and its first offering - the ProShares Bitcoin Strategy ETF - was futures‑based, not spot. Investors worldwide took note of Canada’s success, and the U.S. later adopted a similar spot‑ETF structure after observing Canada’s track record.
Regulatory framework: why Canada got it right
The OSC’s approval process required the fund to meet the same disclosure, custody, and investor‑protection standards as any traditional equity ETF. That meant:
- Independent custodians storing the actual Bitcoin.
- Regular reporting of holdings and NAV.
- Restrictions on leverage and short‑selling.
- Eligibility for TFSA and RRSP accounts.
These safeguards gave institutional investors confidence to allocate capital, something that was impossible in the unregulated crypto‑exchange environment prior to 2021.
Side‑by‑side look: Purpose vs. Evolve Bitcoin ETFs
| Feature | Purpose Bitcoin ETF (BTCC) | Evolve Bitcoin ETF (EBIT) |
|---|---|---|
| Launch date | 18 Feb 2021 | 19 Feb 2021 |
| Custody provider | CoinShares Custody | Coinbase Custody |
| Expense ratio | 0.99% (CAD), 0.95% (USD) | 0.75% (CAD), 0.70% (USD) |
| TFSA/RRSP eligibility | Yes | Yes |
| Average premium/discount (first month) | +0.2% | ‑0.1% |
| Current AUM (Feb 2025) | C$2.3 bn | C$1.5 bn |
Both funds use a direct‑ownership model, but they differ in expense ratios and custodial partners. For a cost‑sensitive investor, Evolve’s lower fees may be attractive, while Purpose’s larger asset base often translates to tighter spreads.
What Canada’s first‑mover advantage teaches other markets
If you’re watching the crypto‑ETF scene in Europe or Asia, the Canadian story offers three clear takeaways:
- Regulatory clarity beats speed. By aligning crypto products with existing securities law, the OSC removed uncertainty for both issuers and investors.
- Spot exposure wins. Investors clearly prefer funds that hold the actual asset instead of futures, which can diverge in price.
- Tax‑advantaged wrapper integration matters. Allowing TFSA/RRSP participation turned a niche product into a mainstream retirement‑saving option.
Regulators elsewhere are now crafting similar frameworks, and many new entrants cite Canada’s model as their blueprint.
Quick checklist: evaluating a Bitcoin ETF
- Does the fund hold physical Bitcoin or only derivatives?
- Who is the custodian, and what insurance coverage is in place?
- Is the ETF eligible for tax‑advantaged accounts in your jurisdiction?
- What is the expense ratio, and how does it compare to peers?
- Check the premium/discount history - tight spreads usually indicate efficient creation/redemption.
Armed with these questions, you can spot a solid product fast.
Looking ahead: the future of Canadian crypto ETFs
Canada isn’t stopping at Bitcoin. Since 2021, the market has seen spot Ethereum ETFs, diversified crypto baskets, and even Bitcoin‑linked closed‑end funds. The regulatory sandbox created by the OSC continues to evolve, hinting at more innovation - perhaps even regulated DeFi exposure within a traditional ETF wrapper.
For now, the Bitcoin ETF Canada story stands as a textbook case of how clear rules, investor demand, and clever product design can transform an emerging asset class into a mainstream investment vehicle.
What is a spot Bitcoin ETF?
A spot Bitcoin ETF holds actual Bitcoin on behalf of shareholders. When you buy a share, the fund purchases the underlying coin, and when you sell, the fund redeems the equivalent amount. This differs from futures‑based ETFs, which only hold contracts that expire at a future date.
Can I hold the Purpose Bitcoin ETF in a TFSA?
Yes. The fund is approved for both Tax‑Free Savings Accounts (TFSA) and Registered Retirement Savings Plans (RRSP), allowing tax‑free growth or tax‑deferred contributions.
How does the expense ratio of the Purpose Bitcoin ETF compare to traditional equity ETFs?
Purpose’s expense ratio sits around 0.99% for CAD‑denominated shares, higher than many broad‑market equity ETFs (often 0.05‑0.20%). The premium reflects custody, security, and regulatory compliance costs unique to crypto.
Why did the US launch a futures‑based Bitcoin ETF before a spot one?
US regulators were concerned about the custody of actual Bitcoin on unregulated exchanges. Futures contracts, traded on regulated exchanges like CME, offered a familiar, less‑risky structure, allowing the SEC to approve a product sooner.
Is the Evolve Bitcoin ETF cheaper than Purpose’s?
Yes. Evolve’s expense ratio is about 0.75% for CAD units, compared with roughly 0.99% for Purpose. Lower fees can improve net returns, especially over long horizons.
What risks should I watch when investing in a Bitcoin ETF?
Key risks include Bitcoin’s price volatility, regulatory changes that could affect fund operations, and custodial security breaches. Even though the ETF is regulated, the underlying asset remains inherently risky.
Rebecca Kurz
October 19, 2025 AT 08:23They say it's legit, but the hidden players are always watching, every crypto move is a trap, and the ETF is just another leash for the fed!!!
Nikhil Chakravarthi Darapu
October 22, 2025 AT 19:43The Indian market will soon surpass these western experiments; our regulators understand the true value of sovereign digital assets better than Canada ever did.
Tiffany Amspacher
October 26, 2025 AT 06:03Oh, the saga of the Bitcoin ETF reads like a modern myth-heroes, villains, and the relentless quest for freedom in a world shackled by banks. It’s a reminder that finance is truly a theater of the absurd, and we are merely the audience.
Lindsey Bird
October 29, 2025 AT 17:23Sure, it’s a milestone, but the hype is louder than the actual utility.
john price
November 2, 2025 AT 04:43Look, the whole thing is just a fancy way to sell risk to dumb investors. If you think this is safe, you’re living in a fantasy.
Ryan Steck
November 5, 2025 AT 16:03Yo, they’re probably masking the real owners of the Bitcoin-big banks pulling strings behind the curtain. Stay woke!
James Williams, III
November 9, 2025 AT 03:23From a technical standpoint, the Purpose ETF employs a custodial model that mitigates counterparty risk via multi‑sig cold storage, which aligns with best practices in institutional crypto custody.
Patrick Day
November 12, 2025 AT 14:43Man, the SEC is just waiting to pounce on anything that looks like a crypto ETF. Canada’s safe now? Not for long.
Scott McCalman
November 16, 2025 AT 02:03Everyone’s acting like this is the end of the road for crypto, but we all know the real drama is just beginning! 😏
PRIYA KUMARI
November 19, 2025 AT 13:23This so‑called “innovation” is just a reckless gamble. Regulators should have slammed it hard before any retail investor got burned.
Jon Miller
November 23, 2025 AT 00:43Yo, I’m still vibing on how quickly the AUM spiked. That’s some wild growth, fam.
del allen
November 26, 2025 AT 12:03It’s cool to see crypto finally getting legit, but I’m still nervous about the volatility 😅
Paul Barnes
November 29, 2025 AT 23:23Spot ETFs are just a mirage; the real value lies in decentralized ownership.
John Lee
December 3, 2025 AT 10:43What’s fascinating is how Canada’s regulatory clarity painted a vibrant path for other jurisdictions-like a lighthouse guiding ships through a stormy sea of uncertainty.
Jireh Edemeka
December 6, 2025 AT 22:03Oh great, another “groundbreaking” product-because what the world truly needed was more paperwork.
Donnie Bolena
December 10, 2025 AT 09:23Hey, I get the fear, but this ETF actually opens doors for everyday folks to dip their toes safely!!!
Elizabeth Chatwood
December 13, 2025 AT 20:43Nice point, but still, the market’s global now and we all benefit from shared progress.
Tom Grimes
December 17, 2025 AT 08:03I read the article and it felt like a drama.
The Bitcoin ETF is a big story for investors.
Many people think it will change everything.
Some say it’s just another product.
Others believe it proves crypto is here to stay.
The fund actually holds real Bitcoin.
That means you don’t have to worry about wallets.
It’s stored in cold storage by a custodian.
The custodian is supposed to keep it safe.
However, nothing is 100% secure.
Hacks have happened before in the crypto world.
So investors should still be careful.
The tax benefits are a nice perk.
Having it in a TFSA can boost returns.
In the end, decide based on your own risk tolerance.
Ty Hoffer Houston
December 20, 2025 AT 19:23Totally get the skepticism; the hype can be blinding, but the underlying tech still has merit.
Jessica Pence
December 24, 2025 AT 06:43Quick note: the ETF’s expense ratio may eat into returns, so compare it with other crypto options before jumping in.
johnny garcia
December 27, 2025 AT 18:03The notion that “big banks pull strings” is not unfounded, given their historic involvement in financial innovation.
Yet, attributing all custodial decisions to clandestine agendas oversimplifies a complex regulatory environment.
The Purpose Bitcoin ETF operates under the stringent oversight of the Ontario Securities Commission.
Its custody partner, a reputable firm, employs multi‑signature cold‑storage solutions.
This architecture is designed to mitigate single‑point failures, a lesson learned from past breaches.
Moreover, the fund’s transparency obligations require regular disclosure of holdings.
Investors can thus audit the underlying assets through public filings.
Nonetheless, the broader market remains vulnerable to systemic shocks.
Price volatility, macroeconomic shifts, and policy changes can all erode value swiftly.
Therefore, while the ETF offers a regulated gateway, it does not nullify inherent cryptocurrency risks.
Diversification across assets and jurisdictions remains prudent.
Retail participants should assess their risk appetite before allocating capital.
Tax‑advantaged wrappers, such as TFSA, can enhance net returns, yet they do not shield against market downturns.
In practice, many investors experience a learning curve when navigating crypto‑centric portfolios.
Education, coupled with disciplined investing, can mitigate many of the pitfalls you fear.
Ultimately, vigilance and due diligence are the best defenses against any hidden agenda. 😊
Andrew Smith
December 31, 2025 AT 05:23Great summary, James! The jargon can be dense, but breaking it down makes it accessible for newcomers.
Joy Garcia
January 3, 2026 AT 16:43Honestly, the SEC is just a wolf in sheep’s clothing; Canada’s calm is only temporary.
mike ballard
January 7, 2026 AT 04:03Scott, the drama is real, but let’s not forget the underlying tech is still evolving. 🤝
Molly van der Schee
January 10, 2026 AT 15:23Priya, I hear your concerns; risk management is crucial, especially for beginners.
Mike Cristobal
January 14, 2026 AT 02:43Jon, AUM spikes are exciting, but they can also mask underlying volatility. 😬
Erik Shear
January 17, 2026 AT 14:03Del, the volatility is real but see it as a feature not a bug.
Tom Glynn
January 21, 2026 AT 01:23Paul, great point-decentralized ownership stays the core, and the ETF is just a bridge. 🚀