Bitcoin’s prominence as the largest cryptocurrency by market cap has led to its popularity among investors. Canadian investors, in particular, have access to innovative ETFs like BTCC and BTCX, offering direct exposure to Bitcoin’s spot price. These ETFs, provided by Purpose Investments and CI Global Asset Management, respectively, are distinct in several ways (BTCC vs BTCX).
Executive summary BTCC vs BTCX
| Feature | BTCC (Purpose Bitcoin ETF) | BTCX (CI Galaxy Bitcoin ETF) |
|---|---|---|
| Management Expense Ratio (MER) | 1.00% | 0.95% |
| Assets Under Management (AUM) | $1.5 billion | $248.85 million |
| Bitcoin Holdings Per Share | Approximately 0.00016202 BTC | Approximately 0.0015 BTC |
| Total Bitcoin in Cold Storage | Approximately 30,678 BTC | Not specified, but ownership implies around 666 shares per BTC |
| Currency Hedging | Not currency hedged | Not currency hedged |
| Tax Advantaged Accounts | Eligible for TFSA and RRSP | Eligible for TFSA and RRSP |
| Annual Fee on $10,000 Investment | $100 | $95 |
| Shares Needed for 1 Bitcoin | Approximately 6,172 shares | Approximately 666 shares |
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Management Expense Ratio (MER)
The BTCC (Purpose Bitcoin ETF) and BTCX (CI Galaxy Bitcoin ETF) are both prominent investment vehicles for those looking to gain exposure to Bitcoin through the structure of an ETF. BTCC, with a Management Expense Ratio (MER) of 1.00%, incurs an annual fee of $100 on a $10,000 investment. On the other hand, BTCX presents a slightly more cost-effective option with an MER of 0.95%, leading to an annual fee of $95 on the same investment amount. This minor difference in fees makes BTCX marginally cheaper than BTCC, potentially offering a slight advantage to cost-conscious investors who are looking to minimize their investment expenses over time.
Assets Under Management (AUM) and Liquidity
The Purpose Bitcoin ETF (BTCC) boasts an Assets Under Management (AUM) of $1.5 billion, indicating a higher level of investor interest and confidence in this particular ETF. This substantial AUM suggests that BTCC may offer better liquidity compared to its counterparts, which can result in narrower bid-ask spreads and a diminished likelihood of the ETF being delisted due to a lack of investor interest. In contrast, the CI Galaxy Bitcoin ETF (BTCX), with an AUM of $248.85 million, though significant, is comparatively smaller than BTCC.
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Bitcoin Holdings Per Share
BTCC: Holds approximately 0.00016202 Bitcoin per share. To own an equivalent of one Bitcoin, an investor would need about 6,172 shares. It holds around 30,678 Bitcoin in total.
BTCX: Each share corresponds to about 0.0015 Bitcoin. Owning around 666 shares would approximate one Bitcoin. The total Bitcoin held is not specified in the provided text.
Storage and Security
Both ETFs store the underlying Bitcoin in secure, offline cold storage, ensuring safety against online threats.
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Tax Advantages
Investors can hold these ETFs in tax-advantaged accounts like TFSA or RRSP in Canada, potentially saving on income tax upon selling.
Currency Hedging
Neither BTCC nor BTCX is currency-hedged. The share prices of these ETFs can be influenced by CAD-USD exchange rate fluctuations, adding an extra layer of volatility for investors.
Final Thoughts BTCC vs BTCX
For investors who prioritize minimizing investment costs, the CI Galaxy Bitcoin ETF (BTCX) may present an attractive option due to its slightly lower Management Expense Ratio (MER) of 0.95%. This cost efficiency can be particularly appealing for those looking to maximize their returns by reducing the fees associated with their investments. On the other hand, investors who prefer the stability and established nature of a larger fund might find the Purpose Bitcoin ETF (BTCC) more to their liking, as it boasts a higher Assets Under Management (AUM) of $1.5 billion. This larger AUM not only reflects BTCC’s popularity but also suggests potentially greater liquidity and a reduced risk of delisting.
When it comes to the amount of Bitcoin exposure per share, BTCX offers a more favorable ratio, making it an attractive choice for investors seeking to maximize their direct Bitcoin exposure through each share of the ETF they hold. This feature could sway investors who wish to align closely with Bitcoin’s market movements.
Additionally, it’s crucial for investors to consider the impact of currency fluctuations on their investments, especially given that both BTCC and BTCX are not currency-hedged. This absence of currency hedging means that the value of the ETFs could be influenced by changes in the CAD-USD exchange rate, introducing an additional layer of volatility. This factor is particularly important for investors who are sensitive to currency risk and its potential impact on their investment returns.
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