Canada's First Bitcoin ETF: History and First Approvals
Bitcoin ETF Fee Calculator
Calculate Your Investment Costs
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 09:23They 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 20:43The 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 08:03Oh, 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 19:23Sure, it’s a milestone, but the hype is louder than the actual utility.
john price
November 2, 2025 AT 06:43Look, 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 18:03Yo, 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 05:23From 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 16:43Man, 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 04:03Everyone’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 15:23This 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 02:43Yo, I’m still vibing on how quickly the AUM spiked. That’s some wild growth, fam.