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Canada’s First Bitcoin ETF: How Purpose BTCC Changed the Game

Bitcoin ETF Comparison Tool

Compare Canadian Spot vs U.S. Futures ETFs

Use this tool to compare key characteristics of the Canadian spot-linked Bitcoin ETFs (BTCC) versus the U.S. futures-based ProShares BITO ETF.

Detailed Feature Comparison
Feature Canadian Spot ETF (BTCC) U.S. Futures ETF (BITO)
Launch Date Feb 18, 2021 (Purpose)
Feb 19, 2021 (Evolve)
Oct 19, 2021
Structure Spot-linked ETF
(Physical Bitcoin)
Futures-based ETF
Custody Cold-storage with qualified custodian No direct Bitcoin custody
Tickers TSX: BTCC.B / BTCC.U NYSE: BITO
TFSA / RRSP Eligibility Yes (Canadian accounts) No (U.S. retirement accounts only)
Tracking Error (2021-2024) ≤ 0.5% ≈ 1.2% (due to futures roll)
Price Alignment Tightly linked to spot price Subject to contango effects
Risk Exposure Direct exposure to Bitcoin price Indirect exposure via futures contracts

Performance Estimate

Note: This is an estimate based on historical performance. Actual returns may vary significantly due to market conditions and fees.

When the Purpose Bitcoin ETFthe world's first spot‑linked Bitcoin exchange‑traded fund started trading on February182021, it gave investors the first true Canada Bitcoin ETF to buy through a regular brokerage.

The fund was created by Purpose InvestmentsToronto‑based asset manager that launched the first spot Bitcoin ETF and is listed on the Toronto Stock ExchangeCanada’s primary equity market.

Key Takeaways

  • Purpose Investments launched the world’s first spot Bitcoin ETF on the Toronto Stock Exchange on 18Feb2021.
  • The fund holds physical Bitcoin, not futures, and can be held inside TFSA and RRSP accounts.
  • Within a month the ETF topped $1billion AUM, and by early2024 it still managed over $2billion.
  • Canada’s regulator, the Ontario Securities Commission, paved the way for subsequent products like the Evolve Bitcoin ETF.
  • The Canadian model later inspired U.S. futures‑based ETFs such as ProShares BITO.

What is a Bitcoin ETF?

A Bitcoin exchange‑traded fund (ETF) bundles Bitcoin ownership into a single security that trades on a stock exchange. Investors buy shares just like a stock, while the fund manager holds the underlying asset. The key advantage is that you avoid setting up a wallet, dealing with private keys, or using a crypto exchange.

Regulatory breakthrough: Ontario Securities Commission

The Ontario Securities CommissionOntario’s securities regulator responsible for protecting investors and maintaining fair markets reviewed the application from Purpose Investments and gave the green light on 18Feb2021. The OSC required a “direct custody” structure, meaning the fund must actually purchase and store Bitcoin rather than rely on derivatives. This requirement set the Canadian product apart from earlier European “ETF‑type” products that were technically exchange‑traded notes.

Purpose Bitcoin ETF - launch details

Purpose Investments filed the offering under the ticker BTCC. Two share classes were created:

  • TSX:BTCC.B - Canadian‑dollar‑denominated units.
  • TSX:BTCC.U - U.S.‑dollar‑denominated units.

The fund’s prospectus states that each newly created share triggers a purchase of an equivalent amount of Bitcoin, stored in cold‑storage wallets managed by a qualified custodian. Because of the direct‑custody model, the ETF can be held inside a Tax‑Free Savings Account (TFSA)Canada’s tax‑advantaged savings vehicle for individuals or a Registered Retirement Savings Plan (RRSP)Canada’s retirement savings account offering tax‑deferred growth, giving retail investors a tax‑efficient way to own Bitcoin.

Market reception and performance

Trading volumes exploded. In the first two days, roughly C$400million of shares changed hands. By the end of the first month the fund topped C$1billion in assets under management (AUM), a speed of growth unseen in traditional ETFs. Within three weeks the net‑asset‑value (NAV) premium shrank to just 0.2%, a testament to the creation‑redemption mechanism that lets authorized participants arbitrage any mispricing.

Three‑year data (Feb2021‑Feb2024) show the fund consistently tracking Bitcoin’s spot price with tracking error under 0.5%. As of February2024, AUM remained above C$2billion, cementing its status as one of the largest spot Bitcoin ETFs worldwide.

Follow‑on products and global ripple effect

Follow‑on products and global ripple effect

Only a day after Purpose’s debut, Evolve Bitcoin ETFCanada’s second spot‑linked Bitcoin ETF, launched by Evolve Funds Group began trading, confirming strong investor appetite. Together, the two funds accounted for over half of all Bitcoin‑related ETF volume on the Toronto Stock Exchange during 2021‑2023.

In the United States, the SEC held out until October2021, when it approved the ProShares Bitcoin Strategy ETF (BITO)U.S. futures‑based Bitcoin ETF that holds only Bitcoin futures contracts. Because BITO can only invest in CME‑cleared Bitcoin futures, its exposure is indirect and subject to contango effects, unlike Canada’s spot‑linked model.

How the ETF works: creation, redemption, and pricing

Authorized participants (typically large banks) can create new BTCC shares by delivering Bitcoin to the fund’s custodian. Conversely, they can redeem shares by returning them to the fund in exchange for Bitcoin. This mechanism keeps the market price tightly aligned with the fund’s NAV, eliminating the large premiums seen in closed‑end funds or unregulated trusts.

Investor considerations

  • Tax efficiency: Holding BTCC in a TFSA or RRSP shields gains from Canadian capital‑gains tax.
  • Liquidity: Daily trading on the Toronto Stock Exchange ensures you can buy or sell at market price.
  • Risk: The fund mirrors Bitcoin’s price volatility; a 20% drop in Bitcoin translates directly to a 20% drop in your ETF shares.
  • Custody risk: Although the fund uses cold‑storage, any breach at the custodian would affect all shareholders.

Comparison: Canadian spot ETF vs. U.S. futures ETF

Key differences between Canada’s spot Bitcoin ETFs and the U.S. futures‑based BITO
FeaturePurpose/Evolve (Canada)ProShares BITO (U.S.)
Launch date18Feb2021 (Purpose), 19Feb2021 (Evolve)19Oct2021
StructureSpot‑linked ETF (physical Bitcoin)Futures‑based ETF
CustodyCold‑storage with qualified custodianNo direct Bitcoin custody
Ticker (TSX)BTCC.B / BTCC.UN/A
Ticker (NYSE)N/ABITO
TFSA / RRSP eligibilityYesNo (U.S. retirement accounts only)
Tracking error (2021‑2024)≤0.5%≈1.2% (due to futures roll)

Legacy and outlook

Canada’s early adoption gave the world a proven template for regulated, spot‑linked Bitcoin exposure. The success of BTCC and Evolve encouraged other jurisdictions-Australia, Brazil, and even the EU-to file their own spot Bitcoin ETF proposals. As of October2025, over a dozen jurisdictions have at least one spot Bitcoin ETF, all tracing their regulatory playbook back to the OSC’s 2021 decision.

For Canadian investors, the market remains vibrant. New products such as a Bitcoin‑plus‑Ethereum multi‑asset ETF have launched in 2024, and the industry is already eyeing a Bitcoin‑based options market to deepen liquidity. The core lesson stays the same: a well‑crafted ETF can turn a complex, technically demanding asset into a simple line‑item on a brokerage statement.

Frequently Asked Questions

Can I hold the Purpose Bitcoin ETF in a TFSA?

Yes. Because BTCC is a qualified investment, you can purchase it inside a Tax‑Free Savings Account, allowing any gains to grow completely tax‑free.

How does the fund store the underlying Bitcoin?

The ETF uses cold‑storage wallets managed by a licensed crypto custodian. Each newly created share results in an equivalent amount of Bitcoin being transferred to those wallets.

What’s the difference between a spot Bitcoin ETF and a futures Bitcoin ETF?

A spot ETF holds actual Bitcoin, so its price mirrors Bitcoin’s spot price. A futures ETF holds contracts that expire every few months, which can cause tracking error and additional roll‑over costs.

Is BTCC safe from hacking?

The custody provider follows industry‑standard security practices, including multi‑signature cold storage and regular audits. While no system is 100% immune, the risk is far lower than holding Bitcoin in a personal wallet.

Can U.S. investors buy the Canadian Bitcoin ETF?

Yes, through a brokerage that offers access to the Toronto Stock Exchange and supports cross‑border accounts. However, U.S. tax treatment will follow IRS rules for foreign securities.

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