Financial institutions in Canada and regulatory bodies are really working on the front foot to bring Bitcoin derivative products to the market. After approving two Bitcoin ETFs back in February 2021, Canadian regulators have now approved the first ‘inverse Bitcoin Exchange Traded Fund (ETF)’. Basically, it means that customers can now do both – long and short Bitcoin ETfs.
On Wednesday, April 14, Horizons ETFs Management announced the launch of its BetaPro Bitcoin ETF (“HBIT“) and the BetaPro Inverse Bitcoin ETF (BITI). Shares of these Bitcoin ETFs will start trading on the Toronto Stock Exchange starting Thursday, April 15.
This decision comes just at a time when the Bitcoin (BTC) price rallied past to a new all-time high above $64,000 on Wednesday. Speaking to Bloomberg, Todd Rosenbluth, director of ETF research for CFRA Research said:
“Many investors have a view on Bitcoin and this new ETF will provide an opportunity for those that believe the current price is not justified and that Bitcoin is overdue for a correction.
Horizon’s BetaPro Inverse Bitcoin ETF (BITI) will offer 100% of the inverse daily performance of an index. The press release notes that this index “replicates the returns generated over time through exposure to long notional investments in bitcoin futures”. Note that the inverse Bitcoin ETF will attract a management fee of 1.45%. However, the management fee for its BetaPro Bitcoin ETF (HBIT) product is just 1%. In a statement, Steve Hawkins, chief executive officer of Horizons ETFs said:
“We know that there are polarizing views on bitcoin and as a result, there are investors with a high degree of conviction on both the bullish and bearish cases for the asset class. In launching HBIT and BITI, our goal is to provide investment tools that allow investors to get liquid access to the returns of bitcoin futures with the ability to go long or short the asset class, based on their outlook and conviction.
Buying HBIT and BITI is as easy as buying any stock or other ETF through a broker, and doesn’t require investors to open up separate cryptocurrency accounts. Additionally, BITI will offer a way for investors to achieve ‘short’ exposure to Bitcoin without having to use a margin account or shorting futures.”
Building Pressure for a U.S. Bitcoin ETF
With Canada’s aggressive and swift move on introducing Bitcoin ETF products in the market, institutional players all have their eyes on the U.S. markets currently. The U.S. SEC is under increasing pressure as chairman Gary Gensler takes charge of the office just a day back on Tuesday.
Last week, the U.S. SEC also confirmed that it has started reviewing the Bitcoin ETF filing from WisdomTree. Mike Novogratz’s Galaxy Digital has been the latest to apply for a U.S. Bitcoin ETF.
On the other hand, the Purpose Bitcoin ETF has already crossed $1 billion in Bitcoin holdings.