Arxnovum Investments has applied to register a Bitcoin Exchange Traded Fund (ETF) in Canada. The Winklevoss brothers’ New York Gemini Trust will hold the fund’s assets.
Arxnovum Investments has applied for the launch of the Arxnovum Bitcoin ETF with the Ontario Securities Commission (OSC). The firm plans to list the financial instrument on the Toronto Stock Exchange (TSX) under the ticker “BIT.U.”.
The statement to the regulator was sent by the CEO of Arxnovum Investments Inc Shaun Cumby. Previously, he worked as the CIO of the Canadian digital asset management company 3iq Corp. 3iq Corp launched the Bitcoin Fund, a regulated closed-end investment fund, which began trading on the TSX last year. The company had to seek permission from OSC for three years.
The Gemini Trust will act as a sub-custodian of the Arxnovum Bitcoin ETF. It will store the bitcoins held by this fund outside of Canada. The Arxnovum Bitcoin ETF will provide investors with access to Bitcoin and track the daily fluctuations of the USD BTC exchange rate. The fund will buy bitcoin futures and other derivatives listed on the Chicago Mercantile Exchange (CME) and other exchanges that are regulated by the US Commodity Futures Trading Commission (CFTC). In addition, the Arxnovum Bitcoin ETF can hold cash, cash equivalents and fixed income securities.
Arxnovum Investments has warned that investing in bitcoin ETFs can carry a high level of risk. Even if the regulator approves the launch of the fund, there is no guarantee that it will be listed on TSX. In 2020, the US Securities and Exchange Commission (SEC) rejected all applications to launch Bitcoin ETFs. Therefore, many in the cryptocurrency industry are hoping that regulators will be more likely to approve such applications this year.
However, analysts at JPMorgan Bank believe that the launch of an ETF on Bitcoin may have a negative impact on the price of this cryptocurrency. But in the long run such a product will have many benefits.