A new Bitcoin trust was today listed on the Toronto Stock Exchange. Investment firm Ninepoint Partners launched the fund after raising $230 CAD ($180 USD) in an Initial Public Offering (IPO)—the largest amount raised for a trust in Canada to date. Crypto exchange Gemini will be the custodian.
The trust will work like other cryptocurrency trusts—such as those provided by leading asset management firm —by allowing people to invest in Bitcoin without actually having to buy and store the cryptocurrency.
But trusts differ from the highly sought after , or exchange traded fund—which still doesn’t exist in the US or Canada. Ninepoint’s trust allows investors to buy shares in a trust. An ETF allows investors to invest in a fund that directly tracks the price of Bitcoin.
From an investor’s point of view, potential downsides to these sorts of crypto trusts are that they can come with high premiums in order for the institution to make a profit.
Nevertheless, trusts like these are proving popular with traditional investors who perhaps may not be as tech-savvy as those in the cryptocurrency world but still want a piece of an asset that has surged in value by over 250% in the past year.
With a trust like Ninepoint’s, investors do not have to worry about Bitcoin wallets, private keys, and where to buy the asset—they simply buy shares that represent the cryptocurrency. Ninepoint is the company that buys the cryptocurrency and stores it.
“We believe our institutional quality trust structure and lowest management fee of any listed bitcoin investment fund in Canada will be a winning combination for continued investor interest,” John Wilson, Co-CEO and Managing Partner of Ninepoint, said in a statement released today.
The firm is the latest Canadian company to have Bitcoin shares listed on the Toronto Stock Exchange. 3iQ was the first, when it launched last year. And just last month it launched an Ethereum fund after raising $75 million.
Ninepoint said that the money raised from the IPO will be available to trade via units: 7,318,276 Class A Units; 2,865,314 Class F Units; and 7,806,901 Class S Units. Units will be available to trade at a price of $10 per unit, the firm said.
Congratulations @Ninepoint on the launch of the Bitcoin Trust Closed-End Fund on #TSX!$BITC.U & $BITC.UN aim to provide a secure, simpler and exchange-traded investment alternative for buying and holding #Bitcoin.
— Canada's Markets (@tsx_tsxv) January 27, 2021
The Class A Units are today available on the Toronto Stock exchange under BITC.U for USD and BITC.UN for CAD.
Ninepoint Partners is one of Canada’s biggest alternative investment management firms and manages around $7 billion in assets institutional contracts.