| investment | Investment account | Purchase price | Selling price | Win | Capital gains tax | Profits after taxes |
|---|---|---|---|---|---|---|
| Bitcoin | Not registered | $23,500 | 61,000 US dollars | $37,500 | $3,750 | 33,750 USD |
| Bitcoin ETF | TFSA | $23,500 | 61,000 US dollars | $37,500 | $0 | $37,500 |
As you possibly can see, the profit of the tax-free Bitcoin ETF on this hypothetical situation is $3,750, which is about 11% greater than the after-tax profit on Bitcoin.
Canadian Crypto ETFs
The table below lists all crypto spot ETFs based in Canada. You can purchase Bitcoin ETFs (ETFs that invest entirely in BTC), Ethereum or Ether ETFs (that invest entirely in ETH), or multi-crypto ETFs (that put money into BTC and ETH). Currently, BTC and ETH are the one cryptocurrencies available through ETFs. (Figures are current as of August 30, 2024.)
| ETF | Ticker symbol | Administrative expense ratio (MER) | Assets under management (in Canadian dollars) |
|---|---|---|---|
| Bitcoin ETFs | |||
| Purpose Bitcoin ETF | BTCC / BTCC.B | 1.5% | 2.1 billion US dollars |
| CI Galaxy Bitcoin ETF | BTCX.B | 0.77% | 724.7 million US dollars |
| Fidelity Advantage Bitcoin ETF | FBTC | 0.69% | 491.6 million US dollars |
| 3iQ Coinshares Bitcoin ETF | BTCQ | 1.75% | 283 million US dollars |
| Evolve Bitcoin ETF | EBIT | 0.75% | 165.5 million US dollars |
| Ethereum (Ether) ETFs | |||
| Purpose Ether ETF | ETHH / ETHH.B | 1.47%–1.49% | 318.7 million US dollars |
| CI Galaxy Ethereum ETF | ETHX.B | 0.77% | 385 million US dollars |
| Evolve Ethereum ETF | ETHR | 0.75% | 55.2 million US dollars |
| 3iQ Ethereum Staking ETF | ETHQ | 1.97% | 65.8 million US dollars |
| Fidelity Advantage ETF | CONQUEST | 0.95% | 18.7 million US dollars |
| Multiple cryptocurrency ETFs | |||
| Developing cryptocurrency ETFs | ETC | 0.85% | 35.4 million US dollars |
| CI Galaxy Multi-Crypto ETF | CMCX.B | 1.03% | 3.7 million US dollars |
US Crypto ETFs: Should You Invest?
US-based Bitcoin ETFs have been making quite a splash in 2024. The Securities and Exchange Commission (SEC) approved the primary one in January, nearly three years after Purpose Investments launched Canada’s first spot Bitcoin ETF.
Numerous American ETF providers now offer Bitcoin ETFs, including major investment brands like BlackRock’s iShares, Fidelity and Invesco. Canadian investors can even buy these ETFs through their discount brokerage account – just like several US stock or ETF. And yes, these ETFs will be held in registered accounts just like the TFSA or RRSP.
Which is best: Canadian or US ETFs?
Honestly, there will not be much difference between the 2. For example, Bitcoin ETFs in each countries contain the identical underlying asset: Bitcoin. Investors could make a call based on their preferred parameters.
For example, you possibly can select the Bitcoin ETF with the bottom management expense ratio (MER) or the very best assets under management (AUM), or search for the oldest fund – no matter where it is predicated.
If you select a Canadian ETF, chances are you’ll face more decisions: Do you wish a Canadian ETF that hedges its currency risk or one that does not? Do you desire to hold the ETF in U.S. dollars? The table below shows the choices for an example, the Purpose Bitcoin ETF. (Figures are current as of September 13, 2024.)
| ETF (stock exchange symbol) | currency | Currency hedging | Return for one yr |
|---|---|---|---|
| BTCC | Canadian Dollar | Yes | 117.94% |
| BTCC.B | Canadian Dollar | NO | 121.15% |
| BTCC.U | US Dollar | NO | 120.88% |
In the best column, you possibly can see a difference within the ETFs’ historical returns over a yr, despite the fact that all of them hold Bitcoin as their underlying asset. This difference is on account of the appreciation or depreciation of the currency wherein the ETF holds its Bitcoin. In this case, the unhedged ETF delivered higher returns since it benefited from the appreciation of the U.S. dollar against the Canadian dollar. But you could not have known that a yr ago. Like all financial markets, the foreign exchange market is essentially unpredictable.
