US Bitcoin ETFs Widely Available, Yet Europe & Canada Listings Remain Popular

Canadian, and several European, Bitcoin ETFs are backed by "physical bitcoin", in contrast to US BTC-ETF's that are backed by bitcoin futures contracts.

Despite the fact that bitcoin futures-backed ETFs are now available in the US, interest from investors in bitcoin (BTC) -backed exchange-traded funds (ETFs) and closely linked exchange-traded products (ETPs) listed in Canada and Switzerland has remained strong, according to trading data.

The Purpose Bitcoin ETF (BTCC) was the first bitcoin ETF to be released in North America, debuting in Canada on February 18 this year. Since then, four other bitcoin ETFs have been launched in Canada: Evolve Bitcoin ETF (EBIT), CI Galaxy Bitcoin ETF (BTCX), 3iQ CoinShares Bitcoin ETF (BTCQ), and Fidelity Advantage Bitcoin ETF.

Among these, Fidelity's ETF was the last to be launched, coming into effect on December 2 after receiving pushback from US authorities over their intentions to list there.

The Canadian bitcoin ETFs differ from the ones listed in the United States in that they are all backed by ‘physical' bitcoin, whereas the US-listed bitcoin ETFs are only backed by bitcoin futures contracts, which adds to the complexity and management of an ETF.

Since becoming the first bitcoin ETF in Canada, BTCC's assets under management (AUM) have grown dramatically, and even during periods of decreased bitcoin values, it has remained stable.

Even as the first bitcoin futures ETF, BITO, debuted in the United States on October 19th this year, demand for the ETF remained high. Rather than seeing a fall in assets under management, capital continued to flow into the fund, indicating that physically backed ETFs are not disturbed by newer futures-backed ETFs.

Looking at trading activity for the second Canadian bitcoin ETF, EBIT, it's obvious that interest has been strong. In November, compared to the days immediately following the debut in February, more trading was done.

On December 21, ABTC's trading volume 20-day average was 12,840 shares, contrasted to a 60,000 share average at the start of the year. EBIT trading volumes did not fall as a result of the US introduction, with interest increasing even more in the days following.

In Europe, several physically-backed bitcoin ETFs are already available, with Switzerland having a long history of being an open market for bitcoin ETFs. The country is now home to a number of bitcoin-focused ETFs and ETPs from well-known firms such as WisdomTree, 21Shares, CoinShares, and VanEck.

The WisdomTree BTCW ETF, one of several bitcoin investment vehicles available in Switzerland, has seen relatively constant trading volumes recently. However, just like many of the Canadian ETFs, BTCW saw a peak in volume shortly after the debut of the first bitcoin futures ETF in the United States.

The trading volume for BTCW hit a peak on October 20, with 633,572 shares changing hands that day compared to just 38,326 as of Tuesday this week.

Finally, 21Stock's Bitcoin ETF (ABTC), which is listed in Switzerland, has seen decreasing trading volumes during the second half of this year. In contrast to the much stronger interest that was seen for this ETF in late 2020 and early 2021, when there were less bitcoin-backed investment options available, lower trade volumes are noted.

As of December 21, 3,976 ABTC shares were traded, as opposed to a 20-day moving average of almost 60,000 shares at the beginning of the year.  After BITO went live in the US, ABTC did not experience any significant impact on trading volume in Canada or Switzerland, unlike some other ETFs.

Looking at how interest in these funds has evolved since the debut of the first bitcoin futures-backed ETF, it's clear that this fall's introduction of the first bitcoin futures ETF in the United States was a major moment for the market.  Despite the fact that every bitcoin ETF ever created in the United States has been backed by futures contracts, not actual bitcoins, which are clearly preferred by investors.

All of this has generated a strong interest in bitcoin as an investment, both in North America and Europe, as shown by the consistently high demand for bitcoin-backed ETFs and ETPs in all of these markets.

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