The interest in cryptocurrencies has exploded over the years and cryptocurrency has continued to rise as 2021 has arrived, with Bitcoin breaching $55,000 before being brought back to the relative lows of $47,000, which is where it is trading currently. This is put in perspective by the fact that Bitcoin was at around $5,000 in March 2020, and even as recently as December 2020, it was only trading around 22,000. Thus, we can see just how sharp and steep its rise has been, and this has been mirrored by other tokens such as Dogecoin and Ethereum as well. Ethereum, in particular, has been drawing a lot of attention, largely due to the fact that the Etherum blockchain consists of smart contracts, which have a lot of applications outside of finance. We are seeing many businesses and companies across the world looking at the Ethereum blockchain to support their operations and provide solutions, and therefore this has led to some observers believing that it will be Ethereum, and not Bitcoin, that will be the crypto token of the future. There are many in the industry who believe this to be the case, and so are backing Ethereum in a big manner. Evolve Funds Group, in Canada, is one such firm, and it has now put in place plans to roll out an Ethereum ETF in the Canadian market.
Evolve already has a crypto product on the market in the form of a Bitcoin ETF, and it is now looking to debut an Ether ETF as well, having filed the preliminary prospectus with Canadian regulators. This ETF would give investors exposure to the price movements of the USD price of Ethereum, and the ETF will track the Ether-Dollar Reference Rate (ETHUSD_RR) provided by CF Benchmarks as its benchmark. This would be the second such ETF in the world, after CI Global Asset Management filed a preliminary prospectus, also in Canada, for what would be the first Ether ETF.
It is interesting that we are seeing these developments take place in Canada, which has had a very open attitude towards cryptocurrencies. As mentioned earlier, Evolve already has a Bitcoin ETF which is trading on the Toronto Stock Exchange, while Purpose Investments had launched the first Bitcoin ETF in the country in February. Canada has seen a lot of interest in cryptocurrencies, and this extends beyond the financial services sector. There are a number of other areas where cryptocurrencies and blockchain are being utilised, with online gambling being one such sector. There are various casino operators which are using blockchain to support their websites and games, Canadian ETH casino providers have become quite popular, since their games are safer, quicker and more reliable due to the blockchain. Players also have the option to place bets through cryptocurrencies, and this shows how cryptocurrencies can have an impact on sectors that may seem unrelated at first.
Crypto’s popularity in Canada can also be seen by the fact that Purpose’s Bitcoin ETF, which was the first such asset, saw its assets under management (AUM) reach $500 million in less than a month since its launch. Thus, there is definitely a market for these sort of products, and this impending launch will provide Canadians with the opportunity to gain exposure to Ethereum, which has a lot more potential than Bitcoin according to some analysts. Ethereum is already the second-largest cryptocurrency in the world by market capitalization, and it is the most widely-used blockchain for supporting transactions and computational services globally. Thus, it will be interesting to see if the demand for this ETF matches that for Bitcoin ETFs, and how volatile its price proves to be in the coming months.
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