Cryptocurrencies, such as Bitcoin and Ethereum, have revolutionized the financial world, providing a novel way to accumulate and store wealth. Many people choose to invest directly in digital assets by purchasing and holding digital currencies. However, not everyone agrees with this view, so more and more people are beginning to pay attention to more convenient cryptocurrency investment products, one of which is cryptocurrency exchange-traded funds (ETFs).

Cryptocurrency ETFs allow investors to gain exposure to the digital currency market without holding or managing actual coins. These funds are listed on traditional stock exchanges, making them convenient for investors who are not familiar with operating digital wallets.

Canada became one of the first countries to launch Bitcoin and Ethereum ETFs in 2021. These ETFs are popular because they allow investors to grow wealth in tax-protected accounts, including registered retirement savings plans (RRSPs) or tax-free savings accounts (TFSAs).

In this article, we will explore some of the top Bitcoin ETFs in Canada. These ETFs offer investors a safe and convenient way to participate in the growing world of digital assets.

### The appeal of cryptocurrency ETFs

Investors have a soft spot for cryptocurrency ETFs because they offer exposure to growing demand for digital currencies like Bitcoin and Ethereum. These funds are favored by investors looking to diversify their portfolios. While some choose to buy and hold digital currencies directly, others prefer the simplicity of investing in ETFs.

One of the main advantages of crypto ETFs is that they are traded on exchanges. This ensures high liquidity, meaning they can be easily bought and sold. As Rose Mayfield, investment strategist at Robert W. Baird & Co., noted in 2021, there is a strong demand for Bitcoin products that offer liquidity, exchange trading, and ease of use.

This demand is only growing. Sean Farrell, head of digital asset strategy at Fundstrat, said in 2023 that the value of the Bitcoin ETF market could surpass the precious metals ETF market. He predicted that the market size of Bitcoin ETFs could reach $300 billion. This level of growth highlights the strong interest in Bitcoin ETFs as a financial product.

In addition, cryptocurrencies such as Bitcoin have been widely accepted in the country, creating a good opportunity for the development of Bitcoin ETFs. The high liquidity of the crypto market has prompted more companies to support crypto payments, so e-commerce platforms such as retailers now allow customers to pay for products with cryptocurrencies. In addition, some large online venues in Canada, such as casinos, also offer Bitcoin as a payment option. In general, online casinos in Canada process Bitcoin transactions faster than traditional banking options, and the transaction fees for Bitcoin withdrawals are relatively low.

### Canada’s Early Adoption of Bitcoin ETFs

In 2021, Canada became a leader in the cryptocurrency ETF market by launching Bitcoin and Ethereum ETFs. This marked an important milestone in the financial world as these products provide investors with a new way to gain exposure to digital currencies. Canada's Bitcoin and Ethereum ETFs allow investors to deposit their earnings into tax-protected accounts, giving them a financial advantage when investing in digital assets.

Ethereum, as the most widely used blockchain technology, is gaining popularity for its ETFs. Ethereum is the second largest cryptocurrency after Bitcoin. As Ethereum’s popularity rises, so too is the interest in its ETFs.

### Canada's Top Bitcoin ETFs

Here are some of the top Canadian Bitcoin ETFs:

**Purpose Bitcoin ETF (TSX: BTCC)**
Purpose Bitcoin ETF is considered the world's first physically settled Bitcoin ETF. This means that the fund is backed by real Bitcoin kept in cold storage, providing investors with a safe option. Managed by Canadian investment company Purpose Investments, investors can easily buy and sell Bitcoin without a digital wallet. The management fee is 1%, providing a convenient way to obtain Bitcoin.

**CI Galaxy Bitcoin ETF (TSX: BTCX.B)**
CI Global Asset Management has partnered with Galaxy Fund Management to launch the ETF. As a leading company in the digital asset space, Galaxy Digital adds credibility to the fund. CI Galaxy Bitcoin ETF gives investors exposure to Bitcoin through an institutional-grade platform, with a management fee of only 0.4%, which is attractive for cost-conscious investors.

**Fidelity Advantage Bitcoin ETF (TSX: FBTC)**
The Fidelity Advantage Bitcoin ETF uses Fidelity's internal cold storage service to ensure the safety of its Bitcoin assets, making it a reliable choice for investors who are concerned about the safety of digital assets. In January 2024, the fund will reduce its management fee to 0.39%, making it more attractive to investors seeking low-cost Bitcoin investment.

**3iQ CoinShares Bitcoin ETF (TSX: BTCQ)**
3iQ CoinShares Bitcoin ETF tracks the USD price of Bitcoin and holds its Bitcoin assets in cold storage. The management fee is 1%, providing investors with a simple and safe way to invest in Bitcoin while tracking its performance in USD.

**Evolve Bitcoin ETF (TSX: EBIT)**
The Evolve Bitcoin ETF provides exposure to Bitcoin based on the CME CF Bitcoin Reference Rate. This is a benchmark index price for Bitcoin that records its USD price on a daily basis. With a management fee of 0.75%, it is a popular choice for investors who want exposure to Bitcoin through a trusted and established ETF.

### How Bitcoin ETFs Affect Bitcoin Prices

The growth of Bitcoin ETFs has had a significant impact on the price of Bitcoin. When companies issue these ETFs, they hold actual Bitcoin to back these products. This creates buying pressure that can drive the price of Bitcoin higher.

Additionally, Bitcoin ETFs make it easier for institutional investors, such as pension funds and hedge funds, to invest in Bitcoin. This further increases demand, which in turn drives prices higher.

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